Publicis And Omnicom Merge, Creating World's Biggest Advertising Company Jul 28th 2013, 13:24
Publicis and Omnicom, two of the largest global advertising agency holding companies, today confirmed that they will merge.
In an 8 a.m. ET conference call Sunday, Omnicom CEO John Wren and Publicis Groupe Chairman and CEO Maurice Lévy, who will serve as co-CEOs, announced the "merger of equals," to be called Publicis Omnicom Group. The holding companies had combined revenue of roughly $23 billion in 2012; it will have a $35 billion market cap combined. The combined entity will trade on NYSE and Euronext Paris under symbol OMC.
The holding company will be based in the Netherlands and will maintain headquarters in New York and Paris. Publicis Groupe and Omnicom shareholders will each hold approximately 50% of the new company's equity. The merged group will have more than 130,000 employees globally and will be larger than WPP.
After 30 months, Levy will become non-executive chairman and Wren will become CEO.
"This journey started approximately six months ago with casual conversations," Wren said in the call. "It was inconceivable that you could take these two great companies and make them greater." Wren credited Levy with first uttering that it was possible.
"We respect a balance, not only in financial terms," Wren said, adding that all stakeholders will benefit from the merger, including talent, which will have new opportunities available to them.
"What we could always use more of is talented people. From every one of our stakeholders, top people, top clients, our shareholders—this is being done with a clear intention that we're going to create value and create something that perhaps no one else had been able to contemplate creating," Wren said.
He also said there are no planned job cuts. "This wasn't done so that we can go in and cut jobs," Wren said, adding that the complementary skills in the two groups create opportunities that never were there before.
Clients, meanwhile, will benefit from the breadth of expertise and service offerings now available.
"We'll be able to do things better, faster, get closer to things that are relevant in a very changing environment and we won't be as challenged as we would have been in a traditional sense," Wren said.
"Changing consumer behavior, new talent to emerge, big data explosion, access to new tools—this leads to a powerful new solution for our clients," Levy said. "Our mission together is to create that new center."
It remains to be seen to what extent the integration logistics will affect the client experience. When asked how the new entity will handle integration and simultaneously attend to clients, Wren responded, "We will continue to work hard for the clients. We will make whatever effort we have to to make sure our clients are happy will be able to deliver even more resources [combined that we could have individually]."
"We will form a transition team," Levy added. "They will have to build a plan. Both of us have great experience at merging, acquiring, so it's not something that's totally new to us."
The merger will also create scale that will aid them in emerging markets, Wren added.
Publicis Omnicom Group agencies will include BBDO, Saatchi & Saatchi, DDB, Leo Burnett, TBWA, Razorfish, Digitas LBi, Ketchum, StarcomMediaVest, Interbrand, RAPP, Publicis Healthcare Communications Group, Rosetta, ZenithOptimedia and Goodby, Silverstein & Partners, among others, representing clients such as PepsiCo, McDonald's, Coca-Cola, Apple, Visa, Volkswagen, Procter & Gamble, and GM.
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