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Agency.Com-Eagle River Merger Creates a Giant

Agency.com in New York City is merging with Eagle River Interactive in Chicago to form the world's largest interactive agency.

The new company will retain the Agency.com name, and will have projected 1998 revenues of $80 million. Financial terms of the deal were not disclosed.

Headquartered in New York, the company will have more than 575 employees with offices in Avon, CO, Boston, Chicago, Dallas, Portland, OR, San Francisco, Wellesley, MA and Woodbridge, NJ in the U.S., as well as offices in London and Paris.

The new enterprise will combine the strategy and creative expertise of Agency.com with the business and technology solutions capabilities of Eagle River Interactive, the companies said.

Chan Suh will continue as chief executive officer of Agency.com; Kevin Rowe, president of Eagle River Interactive, will become president of Agency.com North America.

The big winner may be advertising agency holding company Omnicom Group, which has taken stakes in several of the most prominent start-up interactive agencies. Omnicom owns 40% of Agency.com and all of Eagle River Interactive. The terms of the deal have not been disclosed, but Omnicom's stake in Agency.com will increase to just under half as a result of the deal, Suh told The New York Times.

"By merging with Eagle River Interactive, we have the opportunity to set a new standard in the interactive industry for quality, resources and global reach," said Suh in a statement. "It completes our multi-disciplinary expertise and allows us to provide unrivalled end-to-end interactive solutions for our clients--from high-level strategic consulting to cutting-edge e-commerce and back-end systems."

Said Eagle River's Rowe: "In combining our organizations, we intend to create a fully integrated company that brings together our complementary skill sets and competencies. We will be able to serve our customers locally, while sharing the resources, knowledge and best practices of our global network."

In recent months, Agency.com has also bought Online Magic in London, Spiral Media in New York and Interactive Solutions in Boston. The last two were also owned by Omnicom.

Eagle River clients include Disneyland Paris, Comerica Bank, Compaq, First Chicago, Ford, Freightliner, Hewlett-Packard, IBM, Motorola, Pfizer, Prudential, Sharp, Sprint, Sun Microsystems and USWest.

Agency.com customers include American Express, British Airways, BT, General Motors, Glaxo Wellcome, Harvard Pilgrim Health Care, Hewlett-Packard, Hitachi America, Lucent Technologies, MetLife, Nationwide Insurance, Nickelodeon, Prudential, Reuters, Unilever and Xerox.