Publicis and Omnicom on Sunday announced merger plans to create the world's biggest advertising group, worth $35.1 billion (R2.07 lakh crore), a tie-up that could put pressure on rivals to do deals to keep pace.
The French and US company presented the deal as a "merger of equals" in which Publicis and Omnicom shareholders will each hold about 50% of the new company's equity.
Publicis said the transaction was expected to create "significant value for shareholders", with expected synergies of $500 million. The merged group would keep its head offices in Paris and New York, it said.
"(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 CEO Maurice Levy said in a statement. Levy also said the French government was supportive of the merger.
New-York-based Omnicom owns agencies like BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide while Paris-based Publicis has Leo Burnett Worldwide, Saatchi & Saatchi and DigitasLBi under it.
"(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 CEO Maurice Levy said. Wren and Levy will be joint CEOs for an initial integration and development period of 30 months, after which Levy will become non-executive chairman and Wren, the sole CEO, Publicis said.
Both Publicis and Omnicom shareholders will receive one newly-issued ordinary share of Publicis Omnicom Group for each Publicis or Omnicom share they own (with a special dividend of 1 euro and $2 per share respectively) besides two quarterly dividends of $0.40 per share.