Dive Brief:

• Havas Group has acquired a majority stake in the Los Angeles-based agency Battery, which specializes in marketing for streaming and gaming clients, according to a press release and announcement made at the Cannes Lions International Festival of Creativity. Financial terms of the transaction were not disclosed.
• The deal will integrate Battery into Havas' global agency network Annex under the new moniker Battery Annex. Battery, founded in 2013, will remain in LA and retain co-founder Anson Sowby as chief executive. Annex currently staffs 200 employees, with a large focus on the U.S. through offices in Chicago, New York City and Atlanta. But Vivendi-owned Havas today also announced the opening of its second international Annex location, Annex Bastille, near its Paris headquarters, along with plans to expand a Canadian footprint by building out Battery's presence in the Havas Village in Toronto.
• Battery, through its work with clients like Netflix, Activision Blizzard, 2K Games and Disney, has generated more than $10 million in revenue and staffs over 50 employees. The firm landed on the Inc. 5000 Fastest Growing U.S. Private Company list in 2018 and has been named one of the fastest growing private companies in Los Angeles County by the Los Angeles Business Journal for three consecutive years.

Dive Insight:

With the majority stake in Battery — now Battery Annex — Havas gains a marketing specialist on the ground in Hollywood and in areas of media that are coming to dominate the entertainment industry, namely streaming and gaming. The company also scores a more direct pipeline to some brands that are significantly shaking up culture. Battery has developed award-winning work for clients including Netflix, with its star-studded "Netflix is a Joke" campaign that plays on the platform's original series.

The deal is indicative of the higher premium Havas is putting on the Annex network, which looks to place culture at the center of the agency's marketing efforts. The group, which formed in Chicago in 2015, employs traditional marketers, but also online content creators and influencers in a bid to stay on the bleeding edge of channels like digital. Along with the new Paris location, the Annex has an international office in Singapore that opened last year.

"Convergence of advertising, entertainment, music and gaming remains a priority of Havas and Vivendi, and the Annex is a main part of our evolution," Yannick Bolloré, chairman and CEO of Havas Group, said in a statement around the Battery news.  

Global agency networks like Havas are feeling greater business pressures as brands cut costs, bring more significant marketing work in-house and turn to alternative marketing services providers. Large management consultancies like Accenture have enacted aggressive acquisition strategies in recent years as they look to grow their international marketing operations and sharpen the creative skills that agencies have historically wielded as a competitive advantage. In April, Accenture shocked the industry when it purchased Droga5 in its largest acquisition to date. Much like Battery, Droga5 was a decorated independent shop.

Havas and the Annex's positioning as an edgier, more modern agency offering have occasionally landed them in hot water. In November last year, Ad Age reported on how the culture at the shops' Chicago offices — including aggressive leadership and parties with "scantily clad women" — alienated some employees. This week's "Cannes Lionnes," an alternative to the traditional event that is designed to highlight agencies treating women employees fairly, underscores a broader industry push for gender equality. How Havas and Annex adapt to this change in agency culture will be interesting to watch.