Dentsu / Aegis: ad on acquisition I'm not pretending it's cheap. That sounds like an advertising slogan. In fact, it is the comment of Sir Martin Sorrell, chief executive of WPP, about the $540m he paid last month to buy the ad agency AKQA. Tadashi Ishii, boss of Japanese agency Dentsu, would echo the sentiment. On Thursday he agreed to pay a rich £3.2bn for London-listed Aegis. Dentsu's shareholders will have a hard time finding value in it. The 240p-a-share offer, a 50 per cent premium to the undisturbed share price, implies an exit multiple of about 12 times Aegis" 2011 net earnings. That is broadly in line with recent advertising deals. Dentsu argues that Japan, its home market, accounting for 84 per cent of its £2.7bn annual revenue, is ex-growth, and that Aegis gives it what it wants. The UK group has 45 per cent of its revenues in Europe, 20 per cent in the US and 35 per cent in emerging markets. But unless the combined company can find over £100m in annual synergies - highly unlikely, since advertising is a people business - diversification for its own sake makes no sense. The digital argument is also less than it seems. The future of media is digital, and Aegis gives Dentsu a leg up there. It derives 37 per cent of its annual £1bn revenues from digital advertising, compared with only 15 per cent at Dentsu. But digital's shiny future is (or should be) already in Aegis's share price. True, the high multiples in recent advertising sector deals are down to digital. They will need to deliver an awful lot of value to justify them, however. The happiest man in this deal is French industrialist Vincent Bolloré, who has finally found a buyer for his 26 per cent stake in Aegis. And the deal shows the attractions of the London advertising market after last week's deal by Publicis to buy Bartle Bogle Hegarty. All that is required now is for the creatives to get on.