Omnicom Group expects its $13 billion-plus acquisition of rival Interpublic Group will be completed by close of business Wednesday, according to a joint press release. The announcement follows the deal receiving final regulatory clearances from the European Union over the weekend. The EU approved the transaction “unconditionally,” per a statement, saying a potential merger between the two companies did not raise competition concerns given the presence of competing networks including WPP, Dentsu, Publicis Groupe and Havas.
Bringing Omnicom and IPG together will create the world’s largest marketing services provider and is perhaps the most extreme example of the consolidation trend that is affecting legacy ad-holding groups struggling with growth and changing client demands. Omnicom leadership has cited media, healthcare and precision marketing as some of the biggest areas of synergy with IPG and previously identified late November as a likely timeline to complete the acquisition. Omnicom estimates its media offerings could expand between 50% to 60% with the addition of IPG.
As with many combinations of this scale, the deal has involved some difficult pruning and could see significant changes to the structures of each organization. Industry reports have indicated that some individual agency brands could be deprecated as part of the merger. Meanwhile, IPG has shed 3,200 employees ahead of the takeover, Adweek recently reported.
The mega-deal comes as agency priorities evolve in a broad sense, with firms racing to improve their sophistication in artificial intelligence and data-driven marketing that can be tied to outcomes. At the same time, traditional agency of record appointments are receiving less weight from clients, which are prioritizing more project-based work. Omnicom and IPG have positioned their unified business as “built for intelligent growth,” a likely nod to the AI opportunity they see in wedding their capabilities.
The Omnicom-IPG acquisition was first announced in December and has taken some unusual turns on the path to regulatory sign off. The firms in September agreed to a consent order from the Federal Trade Commission that bars them from denying ad spend to publishers or platforms based on “specific political or ideological viewpoints.”
As one acquisition saga closes, more could crop up in the months ahead as other networks look to get rid of underperforming assets and tap into fresh revenue streams. Havas has expressed an acquisitive appetite but quashed recent rumblings it was in active talks with WPP on some form of deal or investment. Japan-based Dentsu also appears to be mulling a sale for its international business, per the Financial Times. Any of those actions taking place could reshape the competitive set identified by the EU and ultimately may leave clients with fewer choices.
