Omnicom Publicis Group to be world’s #1 ad firm

New partners: Publicis’ Maurice Levy and Omnicom’s John Wren

DDB and Leo Burnett aren’t rival agencies any more.  They will become sister companies in the merger of their respective parent companies, Omnicom Group and Publicis Groupe, which will create Omnicom Publicis Group, the biggest advertising firm on the planet.

The new global conglomerate, worth $35.1 billion, will have some 5,000 offices operating in more than 100 countries on five continents and employ 130,000 people.

CEOs John Wren of New York-headquartered Omnicom and Maurice Levy of Paris-based Publicis will become co-CEOs, according to a joint statement made Sunday in Paris.  

Boards of both companies had recently approved the merger, which is expected to close in the fourth quarter of 2013 or the first quarter of 2014.

Omnicom and Publicis shareholders will each hold about 50% of the new company’s equity. Publicis said the transaction was expected to create “significant value for shareholders,” with expected synergies of $500 million.

The merged group would retain their respective headquarters in New York and Paris.

The move is designed to bolster the companies’ focus on growing Asian and Latin American markets, like China and Brazil, where each has ramped up operations to counter lackluster growth in weak European markets.

The portfolio of strategic holding company Omnicom, formed in 1986 in a merger of DDB, Needham Harper & Steers and BBDO, has 60 companies, including three agency networks, DDB, DDBO and TBWA. 

On its roster of 35 other agencies and media agencies are Critical Mass, Element 79, Goodby, Silverstein, Latin Works and Martin Williams Advertising, and three of the biggest PR firms, Fleishman-Hilliard, Ketchum and Porter Novelli and media agencies.

Publicis global networks are self-named Publicis Groupe, Leo Burnett Worldwide and Saatchi & Saatchi. Among the other agencies in the Groupe are Burrell Communications, Fallon Worldwide, Digitas and Razaorfish. Starcom Mediavest Group; media, digital, healthcare and PR agencies are among its holdings.

Publics’ Levy said in a statement that he and John Wren “conceived this merger to benefit our clients by bringing together the most comprehensive offering of analog and digital services.”

Not everyone in the adworld agrees, however.  The logic of the planned merger was questioned by Havas Worldwide’s’ CEO David Jones.

“I’m not sure this is in the best interests of their clients or their talent.  Clients today want us to be faster, more agile, more nimble and more entrepreneurial, not bigger and more bureaucratic and more complex,” he said in a statement.

“Our business is very simple – it’s about clients and talented employees – and as I said, I’m not sure this move is good for either of them.”

 

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