Omnicom Agrees Deal to Buy Interpublic

Omnicom is to acquire The Interpublic Group, bringing together two of the globe's major marcoms players. The all-stock transaction is set to create the world's largest agency group, with more than 100,000 staff and combined revenue (2023) of $25.6bn, 57% of it from business in the US.

The combined business would have had adjusted EBITDA of $3.9 billion and free cash flow of $3.3 billion, in the full year 2023. The deal gives Interpublic shareholders 39.4% of the business and Omnicom shareholders 60.6%, and is expected to generate annual cost synergies of $750 million. It is scheduled to complete in the second half of 2025 subject to shareholder, regulatory and other approvals.

The new Omnicom will deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding. The firms say the union creates 'an industry leading identity solution with the most comprehensive understanding of consumer behaviors and transactions', advances their ability to innovate and leaves 'significant' free cash flow with the potential for both internal investments and acquisitions.

Interpublic is home to brands including Acxiom, IPG Mediabrands, Kinesso, McCann, Momentum and Weber Shandwick. With the acquisition, three current members of its Board will join the Omnicom Board of Directors, including current Interpublic CEO Philippe Krakowsky (pictured above left) who will serve as Co-Chair of the Integration Committee following the merger, and who along with Daryl Simm (below left) becomes Co-President and COO of Omnicom. John Wren (above right) will remain Chairman & CEO of Omnicom while Phil Angelastro (below right) will remain its EVP & CFO. The combined company will take the Omnicom name and trade under the OMC ticker symbol on the New York Stock Exchange.

Wren comments: 'Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family'. Krakowsky says the two companies have 'highly complementary offerings, geographic presence and cultures' and share 'a foundational belief in the power of ideas, enabled by technology and data'.

A decade ago Omnicom and another global competitor Publicis called off a deal that would have created the world's largest ad firm with around 130,000 staff. No one reason was cited for the collapse of talks over the proposed 'merger of equals' - instead they seemed to grind to a halt and the firms apparently felt it was distracting and unsettling their businesses. Disagreement about corporate officer posts for the combined firm, as well as difficulties getting regulatory approval, were probably significant factors.

Web sites: www.omnicomgroup.com and www.interpublic.com .

Pictured top row L to R Krakowsky, Wren; bottom row Simm, Angleastro

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.