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The
names may be unfamiliar to many Americans, but some of their
marketing campaigns are iconic. Those include “Got Milk” for the
California Milk Processor Board, “Priceless” for Mastercard,
“Because I'm Worth It” for L'Oreal and “Think Different” for
Apple.
The combined company will be worth more than $30 billion.
“Through this combination, we are poised to accelerate
innovation and harness the significant opportunities created by
new technologies in this era of exponential change, said said
John Wren, Chairman and CEO of Omnicom. “Now is the perfect time
to bring together our technologies, capabilities, talent and
geographic footprints to bring clients superior, data-driven
outcomes.”
The company will keep the Omnicom name and trade under the “OMC”
ticker symbol on the New York Stock Exchange.
The size of and reach of the new marketing giant will have
multiple advantages, including the use of new technologies like
artificial intelligence.
“We estimate both companies have an approximately 50/50 split
between advertising and marketing services, setting up a strong
position not only in creative and media, but also across areas
like specialty healthcare, experiential, and PR,” wrote JPMorgan
analyst David Karnovsky.
“For the industry, some amount of consolidation is a positive
following a couple years of divergent growth among agencies and
ahead of an investment cycle for Gen-AI,” Karnovsky added.
Shareholders of The Interpublic Group of Companies Inc. will
receive 0.344 Omnicom shares for each share of Interpublic
common stock that they own. Omnicom shareholders will own 60.6%
of the combined company and Interpublic shareholders will own
39.4% after the transaction is complete.
Wren will be chairman and CEO of Omnicom, while Phil Angelastro
will continue as as executive vice president and chief financial
officer. Interpublic CEO Philippe Krakowsky and Daryl Simm will
be co-presidents and chief operating officers at Omnicom.
Three current members of Interpublic's board, including
Krakowsky, will join the board of Omnicom.
The deal is expected to have annual cost savings of $750 million
and is expected to close during the second half of next year. It
still needs the approval of Omnicom and Interpublic
shareholders.
Shares of Interpublic jumped 10% Monday, while Omnicom's stock
fell more than 6%.
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