The US marketing and corporate communications firm Omnicom Group and the French advertising firm Publicis Groupe have signed an agreement to merge their operations.
The combined firm, to be called Publicis Omnicom Group, is expected to become the world’s largest communications, advertising, marketing and digital services company with an equity market capitalisation of approximately €26.5bn.
Publicis Omnicom Group will have more than 130,000 employees and will offer both analog and digital services for global media giants to build their brands and businesses. It will have a single-tier board of 16 members, with two co-CEOs and seven non-executive directors from each company.
The future scalability and internal synergies of Publicis Omnicom Group are expected to generate efficiencies of €377m.
For the first year after the closure of the deal, Bruce Crawford, currently chairman of Omnicom, will become the non-executive chairman of Publicis Omnicom Group.
Elisabeth Badinter, current chairperson of Publicis Groupe, will succeed Crawford as non-executive chairperson in the second year, after the completion of the deal.
Publicis Omnicom Group will include iconic brands like 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.
John Wren, CEO of Omnicom, said: “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.”
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 behavior. This evolution has created both great challenges and tremendous opportunities for clients.”
Publicis Omnicom Group will be led by CEOs of both the companies for an initial integration and development period of one month, following which Lévy will become non-executive chairman and Wren will continue as CEO.
The transaction, which is subject to shareholders and regulatory approvals, is expected to close in the final quarter of this year or the first-quarter of 2014.
Moelis & Company acted as financial advisor to Omnicom, while Rothschild advised Publicis Groupe on the transaction.