Advertising giant WPP has proposed to sell a majority stake in its subsidiary Kantar, in a deal which values the data business at more than £3 billion and will see £1 billion returned to shareholders.
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Bain Capital, an American private equity firm, will acquire a 60% stake in Kantar under the proposed transaction terms, with proceeds for WPP expected to be 3.1 billion US dollars (£2.5 billion).
Overall the sale would value Kantar, a data and insights company with more than 30,000 employees globally, at 4 billion US dollars (£3.2 billion).
WPP said around 60% of proceeds will be used to reduce debt, but about 1.2 billion dollars (£1 billion) will be returned to shareholders.
However, the transaction would negatively affect WPP’s earnings in 2021, as Kantar accounts for around 15% of the group’s overall sales.
WPP chief executive Mark Read said: “This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”
It is the latest disposal announced by the advertising and media giant, coming less than two weeks after the sale of its 25% stake in sports marketing agency Chime.
WPP also offloaded a majority stake in its post-production business The Farm, which worked on hits including ITV’s Downton Abbey.
Since the departure of former boss and founder Sir Martin Sorrell last year, the company’s new management has vowed to sell off non-core divisions.