The proposed merger between STW Communications Group and WPP has passed its first hurdle, with the Australian Competition and Consumer Commission (ACCC) announcing it will not conduct a public review into the deal.
The merger was announced in December, and while the final details on how the combined entity will be structured is still unknown, the deal is said to double the size of the STW business.
The merged group is estimated to have a pro forma normalised EBIT of $142 million.
However, the decision by the ACCC not to conduct a public review of the merger means the watchdog's conditions to the merger have been satisfied.
Now, the deal hinges on shareholder approval among other conditions. A dispatch of an Explanatory Memorandum into the deal will be distributed in February, with a shareholder meeting expected to be held in March.
Before the announcement of the merger, STW had been on course to reduce the complexity of the group, which saw the number of businesses within the organisation reduced.
STW Group CEO Mike Connaghan says the merger will be “absolutely transformational for the STW Group,” adding “this new group strategy puts us head and shoulders above anyone else in this part of the world”.
While the full impact of the STW Group WPP merger on the Australian market and those agencies that sit within the newly formed entity remains to be seen, further details were given by Connaghan following the announcement last year.
For a full look at a number of aspects of the deal, including changes to headcount, further mergers and financial performance, see AdNews' full coverage here.
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