Publicis Omnicom Group

2013: Plan of creation of the company

In July, 2013 the French Publicis Groupe and the American Omnicom Group agreed about a company merger that as it is supposed, will allow to create the largest advertizing group in the world with revenue of $23 billion and to displace the current leader of WPP Plc. Capitalization of Publicis Omnicom Group will make about $35 billion^[1].

It was planned that shareholders of Publicis and Omnicom will own on 50% of the new enterprise Publicis Omnicom Group.

The CEO of Publicis Maurice Levi and his colleague from Omnicom John Wren will be co-directors of the new company within 30 months then Levi will become the non-executive chairman of the company, and Wren will remain her CEO.

Shareholders and regulators still should consider a question of creation of the company, it is expected that merge will be complete in the first quarter 2014.

The transaction which appeared in a consolidation trend in the sector, underlines the conversions movable by the growing importance of digital technologies and influence of such corporations as Google and Facebook happening in the advertizing industry.

"It is the new company for the new world — Levi at the press conference devoted to the transaction said. — It is the historical moment for us, and for the history of advertizing".

Levi and Wren note that they will be able "to go on a thin edge", having decided on a company merger. After signing of the transaction they insisted that the new company will not be mainly French or American.

"I was always an admirer of Omnicom, sometimes even envied a little" — Levi noted. "Do not forget that I become so the European as far as they — Americans" — Wren noted.

They also promised not to lay off employees.

2014: Failure from merge

Nine months later after the declaration of the transaction during which the transaction at the cost of 35 billion dollars got approval of the majority of regulators the companies stated that they stop consolidation.

Such solution was unanimously approved by board and the supervisory board of Publicis Groupe and Board of Directors of Omnicom Group, the companies distributed a joint statement on May 8, 2014. As it was said in the statement, merge which took place too slowly, negatively influenced shareholders, employees and clients of both groups, and the companies decided to go different ways.

According to the experts, Publicis-Omnicom would occupy 38% of the global advertizing market. By the time of failure from the transaction merge of advertizing giants was already approved by antimonopoly authorities of Russia, the EU, the USA, South Korea, Canada, India, Turkey and the Republic of South Africa.

Experts initially negatively apprehended the consolidation Publicis Groupe and Omnicom Group, poorly representing as the new company will service the largest rival advertisers, for example, of Coca-Cola and PepsiCo.

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