It’s final. Publicis and Omnicom will not merge

09 May,2014


By A Correspondent


There’s one man who must be guffawing at this piece of news. Publicis and Omnicom have agreed to terminate the proposed merger of equals.


The much awaited merger of the two advertising and marketing services giants isn’t happening. A news release that MxMIndia received around dawn today gave a very clear message:


“Publicis Groupe S.A. and Omnicom Group Inc jointly announced that they have terminated their proposed merger of equals by mutual agreement, in view of difficulties in completing the transaction within a reasonable timeframe. The parties have released each other from all obligations with respect to the proposed transaction, and no termination fees will be payable by either party. This decision was unanimously approved by the Management Board and the Supervisory Board of Publicis Groupe and the Board of Directors of Omnicom.”


Maurice Lévy

John Wren

In a joint statement, Maurice Lévy, Chairman and Chief Executive Officer of Publicis Groupe, and John Wren, President and Chief Executive Officer of Omnicom Group, stated: “The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders. We have thus jointly decided to proceed along our independent paths. We, of course, remain competitors, but maintain a great respect for one another.”


When Mr Levy was in India in December 2013, he seemed very bullish about the merger. It had been cleared by the Competition Commission of India (CCI) and was awaiting similar clearances from the European Union, China and Columbia, Mr Levy said. He indicated that the merger should happen around the second quarter of 2014 and made light of the comments of arch rival and WPP CEO Sir Martin Sorrell on the merger as “part of his job”.


When asked whether the Publicis group was on course of its target of doubling revenues by end-2014, Mr Levy said post the merger with Omnicom, it will be more than a doubling.


Meanwhile, in an interview to Adveristing Age, Sir Sorrell said he wasn’t too surprised at the eventuality. When asked why they (Publicis and Omnicom) made the decision in the first place, he said: “I think it was an emotional decision. Wren and Levy wanted to knock WPP off its perches. Any deal was doomed to fail. Secondly, it was Gallic charm. Wren was charmed by Levy into believing Levy would ride off into the sunset. That clearly was not the case if you look at the structure. The third thing: Their eyes were bigger than their tummy. On the quarterly earning calls for Q1, both made the case for separate [companies] being as good as they are together, which begs the question, why did they put the deal together in the first place, if they’re as well off separately as they were before.”


And what does this mean for WPP, Adage asked. Sir Sorrell said: “We obviously made hay while the sun was shining. [On new business] we won Marks and Spencer, Vodafone, E-Trade. There will be further opportunities as a result [of the collapse]. I’m sure there will be repercussions.”


Evidently the last hasn’t been heard on the tu tu main main between the three. As for the various Publicis and Omnicom group agencies in India, it’s going to be business as usual. “For the last year-odd, things have been in a bit of a limbo and we weren’t sure of how we would be going in the months to come,” said a CEO of one of the group companies, requesting for anonymity.


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