Omnicom Group, one of the largest advertising agencies in the world, announced on Monday that it has agreed to acquire Interpublic Group, a major competitor. If the all-stock deal is successful, it will create the world’s biggest advertising agency, employing over 100,000 people and generating approximately $25 billion in revenue annually. This acquisition comes in years of transformation and disruption within the advertising industry, as digital advertising has surpassed traditional channels and technology giants like Meta and Alphabet have gained dominance.
John Wren who is the the chief executive of Omnicom, said in a statement that the acquisition of Interpublic Group, one of the top advertising agencies, would create many significant opportunities with the rise of new technologies in this era of change.
Under the merger deal, shareholders of the Omnicom group would own around 60 per cent of the new combined company, while shareholders of Interpublic Group would hold the remaining shares. Omnicom executives highlighted that they have “clearly identified opportunities” to achieve annual cost savings of $750 million.
The new company would retain the Omnicom name. However, this deal may attract regulatory scrutiny. President-elect Donald J. Trump has indicated that he might be more open to mergers and acquisitions compared to the current administration, which has taken steps to block large mergers in various sectors, including airlines and grocery chains.
Omnicom’s agreement with Interpubliccould provide short-term opportunities for their rivals, according to Bernstein analysts in a research note on Monday.
