Dentsu to transfer ownership of its Russian agencies to local management

Dentsu has announced that it will cease trading in Russia / The Drum

Japanese holding company Dentsu has announced that it will transfer ownership of its agency presence in Russia to local management, in response to the invasion of Ukraine.

Dentsu is now the sixth major advertising company to withdraw, or begin cutting back, its business operations in Russia, following announcements over the last two weeks from WPP, Accenture, Havas, IPG and Publicis.

The company employs 1,500 people in Russia via a joint venture with OKS Group. Several of its agency brands, including DentsuX, Carat, iProspect, Posterscope and TrafficIsobar, trade in the Russian market, dealing with a client base focused on local advertisers.

In a statement emailed to The Drum, a company spokesperson said: “Dentsu International announces today that we are in the process of transferring ownership of our joint venture in Russia to our long-term local partner who will operate independently moving forward.

“Dentsu stands unequivocally with Ukraine and the global community who are calling for the restoration of peace. In these unprecedented times, as a global business we will continue to prioritize the safety of our people and the needs of our clients.

“In Russia we have a long-term local partner who we have operated with for over 25 years. We are in the process of transferring ownership of our joint venture in Russia to this local partner who will operate independently moving forward. More than 90% of the business in Russia services local clients. We have not made this decision lightly as we have 1,500 people in Russia who have supported Dentsu and our clients over many years.

“Our thoughts continue to be with everyone whose lives have been profoundly impacted.“

The spokesperson also said Dentsu was to donate ¥100m ($840,000) to humanitarian efforts in Ukraine: “This is in addition to the £250,000 ($330,000) that was already provided as urgent aid to the Ukrainian Red Cross Society on February 25.

“In Ukraine, we operate via affiliation with a local partner and we care deeply for the welfare of our 500 affiliate employees. Our Dentsu teams around the world, and particularly in EMEA, have stepped up to provide humanitarian support to those impacted in Ukraine including transporting team members and their families from Ukraine borders to Poland, securing job transfers and secondments to other areas in our network and providing legal and housing support.“