Omnicom has agreed a deal to buy one of its biggest rivals, Interpublic (IPG), forming the world’s largest agency group and leapfrogging Britain’s WPP in the process.
Formally announced to the US stock market yesterday (9 December), the move will see the two New York-based juggernauts join forces in what some are terming a ‘mega-merger’.
Bringing together over 100,000 members of staff globally, the two groups currently boast a combined revenue of £21 billion (as of 2023), drawing 57% of this from the US and 43% internationally.
On a more worrying note for its immense workforce, both firms said that they expected the merger would help them make as much as £589 million in “annual cost synergies”. It is not yet know where and when cuts will be made.
“This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth,” Omnicom CEO and chairman John Wren said.
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“Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes.”
The merger bring together some of the world’s largest creative and media agencies under the same roof, and marks a major turning point in the global advertising industry as whole – reducing the traditional ‘big four’ down to a ‘big three’.
According to Campaign, Omnicom is thought to have paid a premium of 21.6% for IPG, based on the closing share prices of the respective companies on Friday 6 December – valuing the firm at around £10 billion. Omnicom has so far not disclosed what it paid for IPG.
IPG CEO, Philippe Krakowsky added: “This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network.”
“Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data. By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that’s changing at speed. We look forward to working with John and the entire Omnicom team.”
