Saatchi & Saatchi plc

British advertising, communications, and consulting company. Founded by the brothers Charles and Maurice Saatchi in 1970, by the mid-1980s it had become the world's largest advertising company. In 1995 the Saatchi & Saatchi group changed its name to Cordiant plc, after the departure of the founding brothers to form the New Saatchi Agency, later renamed M&C Saatchi, which was reported to have overtaken their former company in terms of UK billings in 2000.

The agency's advertisements usually featured provocative or arresting visual images and an economy of text. Saatchi & Saatchi was particularly associated with the Conservative Party under former UK prime minister Margaret Thatcher; it produced the party's successful election campaign in 1979 (and also helped her in 1983). One advertisement showed a long line of unemployed workers and said, in a simple pun: ‘Labour isn't working’.

From 1970 to 1994 Saatchi & Saatchi were at the forefront of a trend towards large mergers in the advertising industry. By the end of 1979 it had become the number one agency in Britain. By 1995 Saatchi & Saatchi's international marketing and communications group had 383 owned and affiliated offices in 84 countries.

Mergers The most important opportunity for the Saatchi agency came in 1975 when it merged with the old and well-established Compton agency of London, so acquiring the accounts of a number of blue-chip clients, chief among them being Proctor & Gamble. Other major clients included the Campbell Soup Company, DuPont, General Mills, Hewlett-Packard, Hyundai, Johnson & Johnson, Philip Morris, and Toyota. The Saatchis went on to create an international advertising network through a series of acquisitions, the most significant being the US agencies Compton Communications, Inc. in 1982 and Dancer-Fitzgerald Sample and Ted Bates in 1986. They also branched out into other areas, buying strategic communications business, The Rowland Company, and management consultants, Hay Group.

Break-up In 1987 the Saatchis made their ill-judged (and unsuccessful) bid for Midland Bank (then the fourth largest in the UK). At that time the company started having serious cash flow problems. Simultaneously, a US investment fund started buying Saatchi shares; holding a controlling interest in the company, US fund manager David Herro ousted Maurice from the Saatchi board (following a controversial share option package) in 1994. Maurice and his brother promptly resigned, taking senior managers and millions of pounds of revenue with them, which led to a war of litigation. The departure of the Saatchi brothers caused the renamed Cordiant group severe losses in revenue. Mars and British Airways moved their accounts to the New Saatchi Agency, along with almost £40 million of revenue. Severance payments and litigation over the Saatchis' departure cost the company a further £11 million.