Experts predict long antitrust road for Omnicom, Publicis

Mon Jul 29, 2013 4:29pm EDT
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By Diane Bartz and Foo Yun Chee

WASHINGTON/BRUSSELS (Reuters) - Publicis (PUBP.PA: Quote) and Omnicom (OMC.N: Quote) will most likely have to shed some assets in order for their mega deal to win approval from regulators in the United States, Europe and 40 other countries where they operate.

The deal would combine the world No. 2 agency, Omnicom, with the No. 3, Publicis, to create the world's largest agency. The companies have expressed confidence that the transaction will move forward.

Four antitrust enforcers polled by Reuters said they thought the deal would be approved, but require some asset sales to restore competition, while three others were more cautious over the regulatory outcome given the complexity of the deal.

Publicis Chief Maurice Levy defended the merger as necessary in a changing, increasingly electronic landscape.

"This is a new company for a new world," 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."

There are other large advertising firms. The current leader is WPP (WPP.L: Quote), and there are three other major firms in the industry - U.S.-based Interpublic (IPG.N: Quote), France's Havas EURC.PA and Japan's Dentsu (4324.T: Quote), as well as many smaller operations.

In Brussels, antitrust experts said the deal would be difficult for enforcers to review.

"The companies claim to have complementarities, both geographically and in terms of activities. This might well be true but there will be significant overlaps in many relevant markets," said Brussels-based antitrust lawyer Salomé Cisnal de Ugarte of Mayer Brown.   Continued...