Omnicom confirmed on Monday that it is set to acquire Interpublic (IPG) in a stock-for-stock transaction, creating the world’s largest ad agency by revenue.
Following the deal’s approval, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis.
According to Omnicom, the transaction is expected to generate $750 million in annual cost synergies – with the majority achievable within 24 months of closing – and the combined 2023 revenue of Omnicom and IPG was $25.6 billion, eclipsing that of WPP.
The company will trade under the ticker, “OMC,” and will boast 100,000 personnel and a combined market capitalization of more than $30 billion.
The company will deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding, and the move will “increase exposure to North America,” according to Omnicom.
John Wren will remain chairman and CEO, while Phil Angelastro will remain EVP and CFO of Omnicom. IPG CEO Philippe Krakowsky and Omnicom president and COO Daryl Simm, meanwhile, will serve as co-presidents and COOs of Omnicom.
“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,” Wren said in this morning’s conference call.
“Our two companies have highly complementary offerings, geographic presence and cultures,” added Krakowsky. “We also share a foundational belief in the power of ideas, enabled by technology and data.”
Wren said there will be immediate impact when it comes to principal-based media buying and ownership of first-party data. Wren added the move will create “pretty incredible job opportunities for people entering this business,” and that both companies are “sensitive to making certain we provide fair opportunities for the best and the brightest.”
The combined entity has strength in healthcare and XM marketing and together “there will be even more we can do for clients.” According to Wren, the companies took “very serious legal advice” and that while it’s impossible to predict what regulators will say, it is confident this merger will not create any issues.
In 2013, Omnicom and Publicis Groupe proposed a merger, which, had it moved forward, would have created a 130,000 employee-strong behemoth.
Omnicom operates a range of services to more than 5,000 clients in 70-plus countries. It is comprised of networks BBDO, DDB, TBWA, as well as agencies Goodby, Silverstein & Partners, GSD&M, Merkley+Partners and Zimmerman. Its media group, meanwhile, includes agencies Hearts & Science, OMD and PHD.
IPG global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Initiative, IPG Health, IPG Mediabrands, Jack Morton, Kinesso, Magna, McCann, Mediahub, Momentum, MRM, MullenLowe, Octagon, UM, Weber Shandwick and others.
