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(Image source: Adweek)
BY MATT PICHT
Two titans in the advertising industry are merging to create the world's largest ad company.
French advertising giant Publicis Groupe is merging with American ad group Omnicom to
form the Publicis Omnicom Group. (Via Publicis Groupe)
With $35 billion in market value, the new company will pass British firm WPP as the
biggest advertising group in the world. (Via BBC)
Omnicom CEO John Wren and Publicis CEO Maurice Levy made the deal official at a Paris press
conference Sunday. (Via Vine / Matthieu ETIENNE)
Wren and Levy will act as joint CEOs of the new company. Wren told reporters the idea
first came up in casual conversation six months ago.
Wren says he and Levy were "pinching ourselves a bit and saying is this really possible?
Can this really happen? ... It is inconceivable that we could take these two great companies
and make them greater." (Via Business Insider)
But the CEO of rival ad agency Havas criticized the deal as outdated and unlikely to help
either company.
"The industry's obsession with mergers and acquisitions still amazes me particularly
in a world where digital and technology have made scale irrelevant. ... In a people business,
mergers and acquisitions rarely create value in the way they do in industrial businesses." (Via The
New York Times)
And the deal is almost guaranteed to attract regulatory attention. Bloomberg estimates
the combined entity spent $3.3 billion in advertising last year.
"That would represent 41 percent of global advertising spend. ... Whenever we do see
size start to produce price advantages that smaller companies can't compete with, that's
always likely to attract regulators."
The deal is expected to be finalized in March of 2014.