WPP's Sorrell sees more deals after Publicis Omnicom
By Kate Holton
LONDON (Reuters) - Martin Sorrell, head of world No. 1 ad group WPP, congratulated long-time rival Maurice Levy on persuading Omnicom to merge, adding that further consolidation was inevitable in the industry.
Sorrell was reacting to news that France's Publicis and U.S. group Omnicom had agreed to combine in a deal that would catapult the world's third- and second-largest advertising companies above UK-based WPP.
"It's an extremely bold, brave and surprising move," Sorrell told Reuters in an interview on Sunday. "You have to give every credit to Maurice, he managed to persuade him.
"It's a great deal for Publicis, being a nil-premium merger," he added, though he said the logic of the deal did not appear to fit with the French group's long-held strategy.
Under the planned merger, the new company would have a combined market valuation of $35.1 billion, with Omnicom providing the majority of revenue, having posted $14.2 billion in sales last year against $8.8 billion for Publicis.
Sorrell said the deal appeared to be "off-strategy" for Levy in that he had built his group up during his 26 year tenure largely through deals with a focus on digital marketing and faster growth markets such as India and China, much like WPP.
"Time will tell if the cultures will click and whether clients will benefit," he said of the deal, which will give Publicis a far greater U.S. presence.
"But further consolidation of our industry is inevitable. An equilibrium may be starting to be established which will generate further significant opportunities for WPP organically." Continued...