September 13, 2016 / 10:33 PM / 3 years ago

Britain's WPP praises 'significant' reforms in Argentina

BUENOS AIRES (Reuters) - The chief executive of the world’s largest advertising company WPP (WPP.L) told Reuters that Argentina’s new government has made “significant” reforms in a short period of time and his group would like to make more acquisitions and investments in the country.

Sir Martin Sorrell, Chairman and Chief Executive Officer of WPP, the world's largest advertising company, poses during an interview with Reuters at the Argentina Business and Investment Forum 2016 in Buenos Aires, Argentina, September 13, 2016. REUTERS/Marcos Brindicci

High-profile British businessman Martin Sorrell also said in an interview on Tuesday the first signs of economic strain can be seen in post-Brexit Britain, even as the group’s operations have looked to be recovering in recent weeks.

Sorrell, in Buenos Aires for a government investment forum, said Argentina under pro-market President Mauricio Macri would be “high on the list” of countries Britain should sign a bilateral trade deal with as the South American country strives to avoid isolation.

“The atmospheric changes that Macri has made as well as the physical changes dealing with the debt crisis and such have been very significant in a very short period of time,” he said.

There are risks, Sorrell said, including Argentina’s historically volatile politics.

“Lots of things can go wrong - there is volatility. Brazil is key,” he said, referring to Argentina’s main trading partner which like Argentina is now mired in recession.

Companies tend to agree with the policies Macri has implemented since taking office in December, and his government is trying to convince them the changes will stick at this week’s Argentina Business & Investment Forum.

WPP, the owner of agencies Ogilvy & Mather, Young & Rubicam and JWT, acquired a 20 percent stake in Argentine technology company Globant (GLOB.N) in 2013 before it went public.

Asked if WPP was considering more acquisitions in Argentina, Sorrell said “We’d like to do more,” emphasizing that WPP tends to make small and medium-sized purchases.

Argentina, Latin America’s No. 3 economy, accounts for some $500 million of WPP’s $20 billion of annual revenue, about the same amount as Brazil and less than Mexico.

Asked if a “post-Brexit recovery” identified by WPP in July continued in August, Sorrell said “I expect it probably has,” though he emphasized the longer term outlook was challenging.

Sorrell is a vocal critic of Britain’s move to leave the European Union. He praised the Bank of England for helping avoid an economic slowdown but said the first signs of strain are visible due to the potential for a prolonged negotiation and lack of clarity for businesses.

“This is going to carry on probably until the end of 2019,” said Sorrell, adding that he is doing more business in Germany post-Brexit.

Reporting by Caroline Stauffer; Editing by Andrew Hay

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