Publicis, Omnicom to merge to create advertising giant

Sun Jul 28, 2013 1:12pm EDT
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By Leila Abboud and James Regan

PARIS (Reuters) - Publicis and Omnicom plan to merge to create the world's biggest advertising group, worth $35.1 billion, a tie-up that could spur rivals to do deals to keep pace with big changes from technology and the Internet.

The companies said on Sunday the transaction - presented as a merger of equals - would bring the necessary scale and investment firepower to cope with rapid changes wrought by technology on the advertising business.

"This is a new company for a new world," Publicis Chief Executive Maurice Levy said.

"It will be able to face the exponential development of new internet giants like Facebook and Google, changing consumer behavior, the explosion of big data, as well as handle the blurring of roles of all the players in the market."

The transaction marks a return of jumbo-sized M&A among the world's 'Big Six' advertising groups, which have spent the past few years buying up much smaller targets in emerging markets and among web marketing specialists.

Other deals might now follow. Current leader WPP could make a move for U.S.-based Interpublic, France's Havas or Japan's Dentsu.

The new company - Publicis Omnicom - will be traded in New York and Paris. It will overtake WPP and have combined sales of nearly $23 billion and 130,000 employees. It brings together Publicis brands such as Saatchi & Saatchi and Leo Burnett with Omnicom's BBDO Worldwide and DDB Worldwide.

The French and U.S. company said shareholders in Publicis and Omnicom would each hold about 50 percent of the new company's equity.   Continued...

Maurice Levy, French advertising group Publicis Chief executive, attends a Reuters Global Media and Technology Summit in Paris June 12, 2012. REUTERS/Mal Langsdon