Global advertising giant Omnicom is negotiating to acquire the remaining 13.16 per cent stake in Clemenger Group, with plans that could usher in a new era for the region’s media and creative landscape. All signs point to former Omnicom employee Nick Garrett playing a key role, which some sources have said could sit above Omnicom’s advertising and media groups.
Omnicom already owns 86.84 per cent of Clemenger Group, which now operates as a single agency (Clemenger BBDO), and is in talks to take full control. Shareholders are set to vote on the proposed deal at a general meeting on 30 June, the same day Clemenger Group’s long-serving chairman Robert Morgan officially steps down, ending a 46-year chapter with the company.
B&T understands that the acquisition could pave the way for a new Oceania management structure that would further integrate Omnicom Media Group and Omnicom Advertising Group in the region with Garrett sitting above. This would align Omnicom with other major holding companies, such as Publicis Groupe, WPP and Dentsu, which either already operate with centralised local management teams and shared services, or have plans to further integrate.
While nothing has been confirmed, sources suggest the move could be a global test case for a unified creative-media agency model in Australia, which could potentially be rolled out elsewhere.
Crucially, sources close to the matter have confirmed that Nick Garrett, a long-time Omnicom executive who has helmed both Clemenger BBDO and Colenso BBDO, is tipped to lead this group.
Garrett left his most recent role as global chief marketing officer at Deloitte Digital earlier this year, fuelling industry speculation about a return to Omnicom. The Australian is reporting that he will commence a new role with the company next month. An Omnicom insider told B&T Garrett is likely to begin a new role, but would not comment on whether he will lead the new structure.
It is understood plans are not firmly set in stone and contingent on “many moving parts,” including the outcome of the Clemenger acquisition.
“There is no certainty that these negotiations will result in an agreement or consummated transaction,” a communication sent to Clemenger Group shareholders reportedly noted.
The relationship between Clemenger and Omnicom has reportedly been strained since the controversial merger of CHEP and Traffik into Clemenger, with some insiders pointing to that consolidation as a catalyst for broader integration.
The proposed acquisition would cap a relationship that began in 1972, when BBDO Worldwide first acquired a 35 per cent stake in the Clemenger agency. That was increased to 74 per cent in 2011, and now, Omnicom is looking to finalise the deal and bring the last piece of the puzzle in-house.
The deal would also solidify Omnicom’s ownership of major creative brands in the region, including TBWA and DDB.
These regional moves come amid a much larger shift; Omnicom is preparing to takeover rival holding company Interpublic Group (IPG), in a global deal still under regulatory review. If approved, it would make Omnicom the world’s largest advertising holding company, leapfrogging WPP and Publicis.
The transaction is expected to generate annual cost synergies of $US750 million ($AU1.16 billion), and will give the combined group more than 100,000 staff. The new combined company would have a 2023 revenue of $US25.6 billion, adjusted EBITA of $US3.9 billion and free cash flow of $US3.3 billion.
“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,” said John Wren, chairman and CEO of Omnicom.
“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. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.”
However, the combined size of the new entity and the overlap in services, such as media buying, have sparked concerns about competition. The ACCC’s preliminary findings are due on 24 July, while New Zealand’s Commerce Commission review is expected next week.
Despite these concerns, industry sources have suggested the Australian market is unlikely to present a significant regulatory barrier to the deal.
Locally, leadership moves have further signalled an impending restructure. Peter Horgan, CEO of Omnicom Media Group ANZ, has left the business with Kristian Kroon, the former chief investment officer effectively stepping up to succeed him. Garrett’s appointment could shift those plans. At IPG Mediabrands, Mark Coad remains the Australian CEO.
Industry insiders believe that Australia could become a testbed for Omnicom’s new agency model, one that fuses media and creative services under a single regional leader. If the Clemenger deal is approved and Garrett takes the reins, Omnicom’s Oceania chapter may look very different in the coming months.
