Thursday 23 November 2017

€26bn merger creates world's biggest ad group

Maurice Levy and John Wren
Maurice Levy and John Wren

Leila Abboud and James Regan

Publicis and Omnicom have announced merger plans to create the world's biggest advertising group, worth $35.1bn (€26.4bn), a tie-up that could put pressure on rivals to do deals to keep pace here in Ireland and overseas.

The transaction marks a return of jumbo-sized mergers and acquisitions (M&A) among the world's 'Big Six' advertising groups, which have spent the past few years buying up much smaller targets in emerging markets and among web marketing specialists.

Publicis and Omnicom shareholders will each hold approximately half of the new company's equity in the deal.

Both companies have operations in Dublin, with Omnicom owning a rake of subsidiaries which cater to clients such as Barry's Tea, Kia Motors and Easyjet, while Publicis' clients include VHI, FBD and Permanent TSB. Both companies also own PR companies here including Pembroke, Fleishman Hilliard and Drury Communications.

Sources in Dublin said last night that the combined company could control up to 50pc of the domestic market and raised competition issues.

Publicis said yesterday that the transaction was expected to create "significant value for shareholders", with expected synergies of $500m. The group would keep its head offices in Paris and New York.

Publicis said the deal was expected to close in the fourth quarter of 2013 or first of 2014.

"(Omnicom head John Wren) and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analog and digital services," Publicis chief executive Maurice Levy said in a statement.

Mr Wren and Mr Levy will be joint CEOs for an initial integration period of 30 months, after which Mr Levy will become non-executive chairman and Mr Wren sole CEO, Publicis said.

EQUALS

Publicis shareholders will receive one newly-issued ordinary share of Publicis Omnicom Group for each Publicis share they own, plus a special dividend of €1 per share.

Omnicom shareholders will receive 0.813 newly-issued ordinary shares of Publicis Omnicom Group for each Omnicom share they own, together with a special dividend of $2.00 per share. They will also receive up to two regular quarterly dividends of $0.40 per share.

The companies said the transaction would be a cross-border merger of equals under Netherlands-based holding company Publicis Omnicom Group. (Additional reporting Reuters)

Irish Independent

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