Omnicom Acquiring Interpublic In $13B Deal Creating World’s Largest Advertising Firm
[ad_1]
Omnicom is acquiring Interpublic in an all-stock deal that will reshape the advertising and marketing sectors, creating the world’s largest ad firm.
The transaction, valued at around $13 billion, was announced Monday morning. Interpublic shares jumped 11% on the news, while Omnicom stock slid 7%, with the moves emulating the classic pattern of a merger.
Of the four major holding companies, Omnicom and Interpublic are Nos. 3 and 4, respectively, based on revenue. Only Publicis and WPP are larger. The majors have not tried to combine since Pubicis and Omnicom announced a merger in 2013, though the proposed transaction was never completed.
Motivating the merger are a complex set of factors shaping the current operating environment. Advertising is a big business and growing larger, with global spending projected to top $1 trillion in 2025, but technology and AI have posed challenges to many traditional players.
After the close of the deal, Omnicom shareholders will own 60.6% of the new entity, with Interpublic shareholders getting the remaining 39.4%. The combined company will keep the name Omnicom, trading under the current ticker symbol, OMC. Annual cost savings of $750 million are expected to result from the combination.
John Wren will remain Chairman and CEO of Omnicom. Phil Angelastro will remain EVP and CFO of Omnicom.
“This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth,” Wren said in the official announcement. “Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes.”
Philippe Krakowsky, who is Interpublic’s CEO and will be on the board of directors of the new company, called the deal “a tremendous strategic opportunity for our stakeholders.” He said the two companies have “highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data.”
