Bloomberg News

Publicis Omnicom Wins EU Approval to Form Biggest Ad Company (1)

January 09, 2014

Publicis Groupe SA (PUB) and Omnicom Group Inc. (OMC:US) won European Union approval to form the world’s largest advertising company, moving them nearer to closing a merger that will topple Martin Sorrell’s WPP Plc. (WPP)

The creation of an industry powerhouse with about $23 billion in revenue doesn’t pose antitrust concerns because customers for marketing communication services and media-buying services can easily switch to other agencies, the European Commission said in an e-mailed statement today. The merger still needs approval in China as well as from shareholders, the companies said in a joint statement.

“Changing agencies would be facilitated by the bidding nature of the markets,” the EU said, “the relatively short duration of contracts and the relatively limited costs incurred for switching.”

Advertising rivals including WPP founder Sorrell and Dentsu Inc.’s Executive Vice President Tim Andree in the past months have said they’ve picked up disgruntled customers and ad executives as Publicis and Omnicom worked through regulatory delays to their tie-up plans.

Publicis Chief Executive Officer Maurice Levy and Omnicom CEO John Wren have said that by getting together, they’ll be able to offer clients integrated campaigns and advanced technology while containing costs. The merger will give the owners more clout to negotiate for their clients better ad rates for media placements on television, the Internet and in print, as the global advertising industry has started to show signs of a recovery.

Burnett, Saatchi

The alliance will bring under one roof agencies including Omnicom’s BBDO Worldwide and Publicis’s Leo Burnett and Saatchi & Saatchi, extending their presence in every major market.

Shareholders of Paris-based Publicis and New York-based Omnicom will each hold about 50 percent of the new entity, Publicis Omnicom Group, the companies said last year.

Shares of Publicis gained 1.71 percent to 66.13 euros at 4:42 p.m. in Paris, while Omnicom rose 2.28 percent to $73.14 in New York.

To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net: Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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Companies Mentioned

  • OMC
    (Omnicom Group Inc)
    • $72.01 USD
    • -0.21
    • -0.29%
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