Details and reaction to the Publicis Omnicom merger

Industry member reaction on the mega deal from Pollin8 founder Lauren Richards, MDC Partners CEO Miles Nadal and GroupM president Dominic Proctor.
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The media and communications landscape was rocked over the weekend with the news that Omnicom is merging with Publicis to create the Publicis Omnicom Group.

With a combined equity market of approximately $35.1 billion, the Publicis Omnicom Group will bring together over 130,000 employees worldwide.

Omnicom agencies include BBDO, DDB, TBWA, OMD and PHD. Publicis Groupe’s roster includes Leo Burnett, Saatchi & Saatchi, Starcom MediaVest and ZenithOptimedia.

Maurice Lévy, chairman and CEO of Publicis Groupe said the deal will help the combined group compete with the rapidly changing media landscape.

“With the creation of the Publicis Omnicom Group we will have the ability and size to attract the best talent and create the best work for clients,” he said in a conference call on Monday morning. “This new chapter is first and foremost a story of talent and innovation in a world being reshaped by technology.”

In terms of client issues, John Wren, CEO of Omnicom says there is no one conflict that would be significant enough to stop the deal.

“Both Maurice and I believe this new company reflects our vision of  retaining the best talent, attracting an incredible roster of clients and leading innovation,” said Wren in the release. “Omnicom and Publicis Groupe are reshaping the industry by setting a new standard for supporting clients with integrated  messaging across marketing disciplines and geographies. 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. In short, we believe this is a merger that will set our new company on a path to accelerated growth, with long-term benefits for clients, employees and shareholders.”

The deal is subject to shareholder approval at both Omnicom and Publicis Groupe and is expected to close in the last quarter of this year or first quarter of 2014. When passed, the Publicis Omnicom Group will operate with Lévy and Wren as co-CEOs for 30 months, following which Lévy will become a non-executive chairman and Wren will continue as CEO. The Group’s operational head offices will continue to be based in Paris and New York and the transaction is a cross-border merger of equals under a holding company, Publicis Omnicom Group, in The Netherlands, according to a release.

Lauren Richards, founder, Pollin8 is “shocked” the news stayed relatively under wraps given the size of the deal.

“Sure there’s the naysayers out there, and they’re coming out in droves, but I think it’s a good pairing,” Richards says. “The leadership at both of these companies understand the powers of their brands, understand the importance of individual market leadership and strategic decision making. And media planning and buying is at the root of it all, I’m sure.  Digital scale and technology advancement, global leverage and data mining, predicting and learning from the mounds of information available is no inexpensive feat.”

Miles Nadal, CEO, MDC Partners says the deal helps to enhance his business’s unique model.

“This is a smart move for Maurice and John and their respective organizations, and I offer my sincere best wishes to the new Publicis Omnicom,” says Nadal. “Thanks to MDC’s unique model and singular focus on doing the most effective, innovative work on behalf of our clients, this also enhances both our future growth and the valuation of MDC, and presents fantastic opportunities for MDC and our partners.”

Dominic Proctor, global president of WPP’s media investment unit GroupM called the merger between the two companies an “interesting move.”

“They are making it clear that a primary motive for the merger is achieving scale in media buying,” said Proctor in a release. “However, neither Omnicom nor Publicis was able to bring their investment teams together effectively as individual companies, so it will be fun to see if they can now do it together. Getting scale in media investment management is critical for clients, but it only works if it all joins up. We welcome a competitor in this space. Media investment management relies heavily on scale, but scale counts for nothing if it continues to be disparate.”