UPDATE: July 12, 2019: WPP said in a press release that it has entered into an agreement to sell 60% of Kantar to Bain Capital for $3.1 billion. The deal is expected to close in early 2020.

Dive Brief:

• Advertising giant WPP officially confirmed that it has entered exclusive talks to sell a controlling stake in market-research unit Kantar Group to Bain Capital, the private equity firm made famous by Mitt Romney. A deal would value Kantar at $4 billion and mark WPP's biggest effort to cut ancillary businesses that aren't part of its plan to boost growth with more agile and tech-savvy ad agencies, The Wall Street Journal reported.

• Mark Read, who last year took over as WPP's CEO following the resignation of founder Martin Sorrell, had said during a dismal Q3 earnings report that the company was open to selling part of its stake in Kantar. WPP on Monday said there's no certainty that its discussions will lead to a transaction involving Kantar. The company announced the talks after several reports citing unnamed sources appeared in the press.

• WPP also announced that it sold its minority stake in communications and sports-marketing group Chime Group Holdings for $69 million. The company said the sale was in line with its strategy to focus on its main areas of business and simplify its operations through the disposal of non-core assets.

Dive Insight:

WPP's announcement that it has entered into an agreement to sell a majority stake in Kantar Group to Bain Capital comes eight months after the advertising giant floated the idea as part of a broader restructuring. For years, WPP expanded to become the world's biggest advertising company through debt-financed acquisitions of ad agencies like Ogilvy & Mather, J. Walter Thompson, Young & Rubicam and Grey.

It also acquired ancillary businesses like Kantar, a respected market-research firm that has under-performed WPP's other groups in recent years, The Wall Street Journal reported. Kantar provides research, data, social-media moderating and other services to help marketers develop brands, campaigns and products. The research industry is changing as marketers seek less expensive online alternatives or gain consumer insights as part of designing digital user experiences that are more significant to tech-savvy younger generations.

Meanwhile, WPP's creative agencies are coping with lower demand for traditional ads as audiences shift their viewing habits to digital media. Marketers are seeking help with influencer marketing campaigns, new product development, data science and real-time content for social-media channels.

By keeping a minority stake in Kantar, WPP stands to benefit from Bain's turnaround efforts while its other agencies have the flexibility to work with other sources of market research. Bain, which competed with several other buyout firms in its bid for Kantar, could revamp the market researcher by cutting headcount in some areas and adding experts in budding fields such as data analytics, user-experience (UX) engineering and multi-touch marketing.

That expertise will help WPP and Kantar to contend with growing competition from non-traditional ad companies like consulting firms that are building on core strengths in technology, strategy and operational expertise to offer a bigger menu of marketing services. For example, consulting firm Accenture this year made the biggest acquisition in its 10-year history with the $475 million purchase of Droga5, a creative agency that has earned industry recognition for clients such as Amazon Prime Video, IHOP and HBO's "Game of Thrones."

Current brand partners with the agency additionally include Chase, Kraft, Hershey and Under Armour. The addition of Droga5 gives Accenture a bigger foothold in the agency business as marketing dollars shift into digital media.