Omnicom Publicis merger on the rocks?

By Rosie Baker | 28 April 2014
 

The upcoming merger between Omnicom and Publicis Groupe is rumoured to be on the rocks, with ownership legacy and legal issues flagged as spanners grinding the gears of progress in what would become the world's largest advertising company.

The Wall Street Journal reports that the two groups have as yet failed to come to an agreement on how the two huge network groups will merge as “equals” as one group must technically acquire the other.

Who will take on senior roles at the newly merged entity are also said to be causing headaches as both sides are said to want their top finance people to fill the chief financial officer role, among others.

The integration of the two companies is a mammoth task and the regulatory hold ups are thought to have meant the delay of around 70 meetings of “integration committees” to share information on clients between the networks, which cannot proceed before regulatory approvals go through.

The $35bn deal was first announced in Paris last year and both companies still believe the deal will go ahead. But the Wall Street Journal, although citing unnamed insiders, reckons there is a long way to go before completion looks feasible. CEO's of both networks have differed on their view of when the merger will complete in recent weeks. In an earnings call on 17 April, Publicis CEO Maurice Lévy said it could be in the third quarter. However, Omnicom CEO John Wren said separately: “Given the proposed merger's complexity and open issues, at this point it's not practical to predict exactly when the transaction will close."

The deal would bring agency networks including BBDO, Saatchi & Saatchi, DDB, Leo Burnett and TBWA, as well as media agencies ZenithOptimedia, Starcom, PHD and OMD, under the same umbrella group and create the world's largest advertising group - knocking Sir Martin Sorrell's WPP group off it's perch. Sorrell however, has called into question the logistics of such a deal from day one.

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