Omnicom Merges With Publicis To Form Largest Advertising Firm

Omnicom Merges With Publicis To Form Largest Advertising Firm

Omnicom Group Inc. (NYSE:OMC) announced its merger of equals agreement with Publicis Groupe SA (ADR) (OTCMKTS:PUBGY) (EPA:PUB) to create the largest advertising, communications, digital services, and marketing firm worldwide and to accelerate revenue growth.

Omnicom Merges With Publicis To Form Largest Advertising Firm

Merger will be called Publicis Omnicom Group

The combined company will be called Publicis Omnicom Group. It has a combined equity market capitalization of approximately $35.1 billion or €26.5 billion based on closing prices of July 26, 2013.  Omnicom Group Inc. (NYSE:OMC) CEO, John Wren and Publicis CEO, Maurice Levy will lead the merged company as co-chief executives.

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In a statement, Levy said, “This evolution has created both great challenges and tremendous opportunities for clients. John and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analog and digital services. Equally important, it will offer our talented people new avenues for growth and success at the crossroads of strategic intelligence, creativity, science and technology.”

On the other hand, Wren said Omnicom Group Inc. (NYSE:OMC) and Publicis Groupe SA (ADR) (OTCMKTS:PUBGY) (EPA:PUB) said the merger allows both companies to take advantage of the exceptional talents of its staffs, and broad product offering, enhanced global footprint, and a great list of local and international clients.

“We believe in a merger that will set our new company on a path to accelerated growth, with long-term benefits for clients, employees, and shareholders,” said Wren.

Combine revenues

Omnicom Group Inc. (NYSE:OMC) and Publicis Groupe SA (ADR) (OTCMKTS:PUBGY) (EPA:PUB) will generate a combine revenue of approximately $23 billion or €18 billion. The merged company is expected to deliver $500 million or €377 million internal synergies and future scalability.

Publicis Omnicom Group will operate some of the leading brands in advertising, communications, digital services, and marketing sectors including Banco Bradesco S.A. (NYSE:BBDO), Saatchi & Saatchi, DDB, Leo Burnett, TBWA, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand, MSLGROUP, RAPP, Publicis Healthcare Communications Group (PHCG), Rosetta, CDM, ZenithOptimedia and Goodby, Silverstein & Partners, among others.

Bruce Crawford, chairman of Omnicom Group Inc. (NYSE:OMC) will serve as non-executive chairman of Publicis Omnicom Group during its first year of operation once the transaction is complete. Elisabeth Badinter, the current chairperson of Publicis Groupe will replace him in the following year.

Publicis Omnicom Group will have a single-tier board with 16 members, consisting of the two co-CEOs and seven non-executive directors from Omnicom Group Inc (NYSE:OMG) and Publicis Groupe SA (ADR) (OTCMKTS:PUBGY) (EPA:PUB).

Shareholders of Publicis Groupe

Under the agreement, the shareholders of the Publicis Groupe SA (ADR) (OTCMKTS:PUBGY) (EPA:PUB) will receive one new ordinary share of Publicis Omnicom Group plus a special dividend of €1.00 per share.

On the other hand, the stockholders of Omnicom Group Inc. (NYSE:OMC) will receive 0.813 new ordinary shares of Publicis Omnicom Group along with a special dividend of $2.00 per share. They will also receive two regular quarterly dividends of $0.40 per share if approved and the record date occurs before the completion of the deal.

Publicis Omnicom Group will be listed at the New York Stock Exchange (NYSE) and Euronext Paris, and will be trading under the ticker OMC. It will be also included in the S&P 500 and CAC 40.

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