Omnicom and Publicis, two of the largest ad agency holding companies, are in late stage talks for a friendly merger of equals, Bloomberg reports.
If consummated, the merger would achieve two major milestones:
1. It would solve the retirement problem of Publicis CEO Maurice Levy, who has been wanting to leave his job for several years but has been persuaded to stay on by his board. The favourite to succeed him, COO Jean-Yves Naouri, is not well known outside France.
2. It would create a single ad company even larger than that of WPP, headed by CEO Martin Sorrell. Levy and Sorrell have an infamous personal rivalry. And there is little business love lost between Sorrell and Omnicom CEO John Wren, either. A joint Omnicom-Publicis entity would be a poke in the eye for Sorrell as he also looks for a leader to succeed him atop WPP.
Publicis-Omnicom would combine several huge, venerable agency brands. Publicis’ Saatchi & Saatchi and Leo Burnett would find themselves in the same house as TBWA, DDB, and BBDO.
It would also create some obvious client conflicts: Publicis’ Leo Burnett handles Coca-Cola; Omnicom’s TBWA handles Pepsi.
Another obvious question: Who would be in charge? While Levy has been known to be planning his retirement, there has been little talk of Wren leaving his perch. That might put the Omnicom chief in charge of the combined army of agencies, with Levy in the chairman’s role.
The deal would be a merger of equals, said the person, who asked not to be named because the deliberations are private. Combined, Paris-based Publicis and New York-based Omnicom would be the largest advertising company in the world, topping current leader WPP (WPP) Plc. The talks could still collapse.
The combined company would have a market cap of $30 billion.
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