Lobedu Consortium acquires majority shareholding in Leo Burnett South Africa

The new partnership will transform and empower one of South Africa's leading advertising and communications groups at both board and management level. Lobedu, which includes leading black business and communications specialists, not only takes an equity stake in Leo Burnett South Africa, but will also deploy two of its senior members full time to the partnership.

The Leo Burnett group of companies in South Africa consist of advertising agencies: Sonnenberg Murphy Leo Burnett, Red Nail, Leo Africa; public relations agency: Manning Selvage & Lee; and independent media company: Starcom. The group will change its name to Lobedu Leo Burnett with immediate effect.

Fred Robertson, Executive Deputy Chairman of listed empowerment company Brimstone Investment Corporation and Chairman of Lion of Africa Insurance Company and Commlife Holdings, becomes Non-Executive Chairman of Leo Burnett South Africa. He will be joined by Zeona Motshabi, currently Head of Corporate Communications at Cell C, who has been appointed as the Managing Director of Sonnenberg Murphy Leo Burnett and advertising and communications industry stalwart Tholi Ngwenya, currently the Head of Advocacy at the International Marketing Council of South Africa, who becomes Group Planning Director. Zeona and Tholi will join Lobedu Leo Burnett during February 2003.

The agreed structure is as a result of a thorough analysis of the challenges and demands facing advertising and communications in South Africa undertaken by a specialist task team engaged by Leo Burnett South Africa several months ago. The team identified and introduced the new partners.

"The strategic equity partnership proposed to us by the task team made immediate sense because it ensures that Leo Burnett can get out ahead of the pack in terms of empowerment, transformation and the ability to respond to the demands of the market," says Reinher Behrens, Chief Executive Officer of Leo Burnett South Africa. "Empowerment at board level strengthens us strategically, while the deployment of senior Lobedu executives ensure that we immediately become an empowered company at a practical and operational level. We expect Zeona and Tholi, together with the existing leadership team, to make further transformation in the agency one of our top priorities as we continue to guarantee the creative and strategic excellence for which we are rightly known."

The brief to the task team following the initial report on industry and regulatory trends in the country was very clear from the outset, says Behrens. "We wanted to appoint strategic equity partners who not only understood the dynamism of our industry, but also partners who would play a meaningful, entrepreneurial and participative role in the operations of the group. Our focus is on the transformation and change of our business, to make meaningful and valuable contributions in our clients, industry and society."

Behrens is confident that Lobedu will be able to effect the necessary changes required within Leo Burnett SA. He continues: "Not only will our new partners control the majority shareholding, but they will play an active operational role in the management of our group."

Fred Robertson was nominated for an Ernst & Young Entrepreneur award in 2002. He has a formidable track record in business, serving as director of various boards such as Remgro, Sea Harvest, SA Tourism board and is also a Trustee of the Business Trust.

Robertson says: "empowerment deals invariably offer different challenges. What excited me most about our partnership with Leo Burnett is the fact that we approached the agreement differently. It was not just a matter of money changing hands, but rather a premise that we would be able to deliver refreshing and creative concepts and strategic insights to existing client business and to expand our core business. I am confident that our consortium members have the diversity and skills to widen the visionary scope of the business and to identify opportunities for our investment to excel. My brief to the partners is to continue to grow our company profitability, to transform effectively and to develop young talent so that we may continue to deliver an excellent service to our clients."

Zeona Motshabi, the current Head of Corporate Communications at Cell C, will assume the role of Managing Director of Sonnenberg Murphy Leo Burnett. She has extensive experience in corporate affairs, marketing and broad communications strategies. Motshabi reflects: "accepting the challenges of managing the business of one of South Africa's most admired advertising agencies as well as directing the future of the groups transformation processes in my capacity as shareholder was tough. I had to weigh it up against moving from one communications industry to another and the probability of succeeding at bringing about desired transformation."

"What tipped the scale was the empowerment model we decided on. The structure lays the foundation of transformation which will give our group the intellectual wherewithal to make a difference in South Africa."

Tholi Ngwenya, a senior and well-respected figure in the marketing communications industry of South Africa will be appointed as Group Planning Director. Ngwenya says: "This marks a special reprise for me, having cut my advertising teeth many years ago at this same agency. So there is an emotional element to this step I'm taking. Having said this, the enormity of the challenge of helping the group reclaim its pre-eminence in the communications industry, as well as the excitement of the opportunities and the competitiveness that the market place presents, are not lost to me. It will be rewarding to be part of the new team tasked with taking the group forward and to expand our business platform."

Behrens concludes: "I believe that we have the better of two worlds, namely a strong international partner in Leo Burnett which is part of the Publicis Groupe, ranked 4th in the world and a strong committed strategic equity partner in Lobedu. It is a truly South African glocal partnership."

Chief Operating Officer of Leo Burnett Worldwide, Steve Gatfield said that they are delighted that Leo Burnett have been able to partner with Lobedu. He considered it to be a critical strategic commitment to the development of business in South Africa which not only empowers, but also enrols key members of Lobedu in the future management and direction of Leo Burnett.