It’s a done deal. Omnicom & Publicis to merge

28 Jul,2013

 

By A Correspondent

 

The Omnicom Group Inc and Publicis Groupe SA announced on Sunday evening India time that they  have signed a definitive agreement for a merger of equals, creating the world’s leading company in communications, advertising, marketing and digital services, with combined 2012 revenue of $22.7 billion / €17.7 billion. Based on closing prices on July 26, 2013, Publicis Omnicom Group will have a combined equity market  capitalization of approximately $35.1 billion / €26.5 billion.

 

The merged group of more than 130,000 employees will be exceptionally well positioned to serve clients’ evolving needs, helping them to build their brands and grow their businesses in the  rapidly changing communications landscape, notes a communiqué.

 

The combination, which has been unanimously approved by the Boards of Directors of both companies, brings together leading agency brands as BBDO, Saatchi & Saatchi, DDB, Leo Burnett, TBWA, Razorfish, Publicis Worldwide, Fleishman Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand, MSLGROUP, RAPP, Publicis Healthcare Communications Group (PHCG), Proximity, Rosetta, CDM, ZenithOptimedia and Goodby, Silverstein & Partners amongst others.

 

Said Maurice Lévy, Chairman and CEO of Publicis Groupe, said: “The communication and marketing landscape has undergone dramatic changes in recent years including the exponential development of new media giants, the explosion of Big Data, blurring of the roles of all players and profound changes in consumer behaviour. This evolution has created both great challenges and tremendous opportunities for clients. John and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analogue and digital services. Equally important, it will offer our talented people new avenues for growth and success at the crossroads of strategic intelligence, creativity, science and technology.”

 

And this is what John Wren, CEO of Omnicom, said: “Both Maurice and I believe this new company reflects our vision of  retaining the best talent, attracting an incredible roster of clients and leading innovation. Omnicom and Publicis Groupe are reshaping the industry by setting a new standard for supporting clients with integrated messaging across marketing disciplines and geographies. This combination will enable us to leverage the skills of our exceptionally talented people,our broad product offering, enhanced global footprint, and tremendous roster of global and local clients. In short, we believe this is a merger that will set our new company on a path to accelerated growth, with long-term benefits for clients, employees and shareholders.”

 

Messrs Wren and Lévy said jointly: “For many years, we have had great respect for one another as well as for the companies we each lead. This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders.”

 

Publicis Omnicom Group has been structured with balanced corporate governance consistent with the spirit  of a merger of equals. Publicis Groupe and Omnicom’s CEOs will lead the company as co-CEOs through an  initial integration and development period of 30 months, following which Mr. Lévy will become non-executive Chairman and Mr. Wren will continue as CEO. The company will have a single-tier board with 16 members, consisting of the two co-CEOs and seven non-executive directors from each company.

 

For the first year following the closing of the transaction, Bruce Crawford, currently Omnicom Chairman, will be the non-executive Chairman of Publicis Omnicom Group. He will be succeeded by the current Publicis Groupe Chairperson, Elisabeth Badinter, as non-executive Chairperson for the second year following the closing of the transaction.

 

According to the communiqué, the future scalability and internal synergies of the combined company are expected to generate efficiencies of $500 million / €377 million. The transaction is a cross-border merger of equals under a holding company, Publicis Omnicom Group, in The Netherlands. The Group’s operational head offices will continue to be based in Paris and New York.

 

The transaction is subject to approval by the shareholders of both companies as well as numerous  regulatory approvals. It is expected to close in the fourth quarter of 2013 or the first quarter of 2014.

 

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