Dentsu explores sale of international operations, taps financial firms to gauge buyer interest

Dentsu Group Inc., the Japan-based global advertising giant, is reportedly exploring the sale of its international operations, a move that could mark a significant retreat from its ambitions to compete on the global stage. 

According to a report by The Financial Times, Dentsu has engaged Mitsubishi UFJ Morgan Stanley and Nomura Securities to gauge market interest in acquiring its international assets, which could fetch several billion dollars in a potential deal.

The decision comes amid a challenging global environment for the advertising industry, with Dentsu facing underperformance in its international markets. The company’s international operations, which include the US-based digital marketing consultancy Merkle and assets from its 2012 acquisition of Britain’s Aegis Group for approximately 400 billion yen, generated over $4.5 billion in net revenue last year. 

However, regions outside Japan have struggled, with organic revenue declining by 8.9% in Asia-Pacific (excluding Japan), 3.4% in the Americas, and 2.4% in Europe, the Middle East, and Africa (EMEA) for the first half of 2025. 

This contrasts sharply with Japan’s strong 5.3% organic revenue growth during the same period.

The company has not finalised any decisions but aims to formulate a firm plan by year-end, according to sources cited by The Financial Times. 

During a recent post-results Q&A, Dentsu’s CEO, Hiroshi Igarashi, hinted at openness to “bold” structural changes, including potential partnerships or divestitures, to enhance competitiveness. “We are looking at various options to increase corporate value,” a Dentsu spokesperson told Jiji Press, emphasising that no decisions have been made.

The potential sale could attract interest from rival advertising companies, private equity firms, and other investment groups, with analysts pointing to players like Accenture Song, large independents, or private equity as possible buyers. However, industry observers note that competitors like Omnicom and IPG are unlikely candidates due to their focus on an impending merger set to conclude by year-end. Stagwell and MSQ have also been mentioned as potential suitors for specific assets like Merkle or regional networks, though a full takeover of Dentsu’s international business, valued at around $4.5 billion in revenue, may be too large for some.

This move follows a series of challenges for Dentsu, including an 8% global staff reduction announced on August 15, 2025, aimed at streamlining corporate and back-office functions. 

The layoffs and potential divestiture signal a strategic pivot, with Dentsu likely refocusing on its stronger domestic market in Japan, where it remains a dominant player. 

The potential sale could reshape the global advertising landscape, reducing competition for industry leaders like WPP and Publicis while offering opportunities for consolidators or financiers to acquire valuable assets. 

Dentsu’s retreat from international markets underscores the difficulties Japanese agency groups face in sustaining global expansion, a challenge also seen with peers like Hakuhodo and ADK.