Omnicom is reportedly in “advanced talks” to acquire IPG in a deal that would create the largest advertising company, according to anonymous sources that spoke with the Wall Street Journal.
Rumblings of a mega-merger have been brewing for some time. During Cannes Lions earlier this year, B&T heard from three high-ranking media execs who had been discussing a deal with other attendees. At the time, though, it was unclear exactly who would be acquiring whom.
Now though, the WSJ believes that a deal could be announced as early as this week(!).
The financial organ said that exact terms of the deal being discussed “couldn’t be learned”.
Though it said the “all-stock deal is likely to value Interpublic at between $US13 billion and $US14 billion ($AU20 and $AU21 billion, respectively), excluding debt” according to its sources. Interpublic had a market value of nearly $US11 billion ($AU17 billion) as of Friday.
A combined entity would have net revenue of more than $US20 billion ($AU31.27 billion), based on 2023 figures for each company.
If Omnicom and IPG were to merge, the new entity would have a net revenue around $US5 billion ($AU7.8 billion) higher than the industry’s current biggest player, WPP.
Combining Omnicom, the world’s third-largest ad company, and Interpublic Group, the fourth-biggest ad company, would topple WPP as the industry’s biggest player. WPP’s net revenue last year was about $US15.1 billion ($AU23.6 billion). All of this, of course, would be subject to significant regulatory scrutiny and approval.
Omnicom’s agencies include TBWA, BBDO and DDB on the creative side, with clients including NAB and Apple, Frito Lay and Heinz, and McDonald’s and Volkswagen, respectively. Its Omnicom Media Group includes OMD, Australia’s largest media buying agency, PHD and Hearts & Science. OMD’s clients include Coles and McDonald’s, again. PHD lists Volkswagen and Virgin Australia on its roster.
IPG, meanwhile, has FCB, McCann, MullenLowe and R/GA among its creative shops. UM and Initiative are its big media buying agencies with clients including the Australian Federal Government and IAG.
A decade ago, Omnicom courted Publicis on a potential merger. However, this deal was canned after a year of negotiations and planning. Since then, Publicis has gone on to outstrip the rest of the industry and posted a net revenue of €13 billion ($AU21.47 billion) in February this year. While WPP remains the largest of the big advertising holding companies, all of them have struggled to keep pace with Publicis in recent years.
Omnicom and IPG had no comment when reached by B&T.
