LIVE! Omnicom And Publicis Announce Their Merger In Paris
Here's the official announcement.
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Publicis CEO Maurice Levy is speaking first, alternating between French and English. He begins by praising Omnicom CEO John Wren.
Now Omnicom CEO John Wren is speaking, in English, to the relief of this reporter. He says talks began six months ago. We were "pinching ourselves a bit and saying is this really possible? Can this really happen?"
"We had many opportunities to test whether we could trust each other or not."
"It is inconceivable that we could take these two great companies and make them greater." He gives credit to Levy for having the idea of the merger first.
Wren is talking about how this will be good for their staff.
It's good from a client's point of view too, he says.
In terms of making both companies' offerings complete, "This gives us the opportunity to accelerate those things."
"Anyone who is concerned about any of this should not be."
"We're going to create value and new opportunities."
Back to Levy, in English.
"It is a merger of equals. The name of the new company will be Publicis Omnicom Groupe, the split of ownership will be roughly 50-50."
"We will be doing this under the ticker symbol of OMC."
$35 billion in market cap.
"This is a new company for a new world."
"A new standard for our industry. Our ambition together is to create that new standard."
"Enhancing growth and optimizing synergies ... enhanced global footprint."
He talks about digital media giants like Google and Amazon: "We will be in a position to better partner with them." (That's about matching them in size at the negotiating table.)
The merger is completely unexpected. It was thought that perhaps Publicis might acquire a smaller network, such as Interpublic, or merge with an Eastern rival like Dentsu.
The new Publicis Omnicom Groupe will have $23 billion in revenues and a market cap of $35 billion.
Adweek notes that if the deal triggers change-in-control provisions at Omnicom, CEO John Wren will receive a $70.6 million payout. Adweek's Noreen O'Leary also describes how the deal will affect the board of Publicis:
Such a transaction would help Publicis buy the stock of retiring chair Elisabeth Badinter, the daughter of Publicis founder Marcel Bleustein-Blanchet, who has been a member of the holding company’s Supervisory Board since 1987 and its chair since 1996. She is expected to retire from that capacity at the end of 2015. Badinter, 69, is Publicis’s largest shareholder, with 9.13 percent of the company’s stock and 16.57 percent of voting rights. At the company’s current stock price of $59.35, her 19.2 million shares are valued at $1.1 billion. Depending on the terms of the deal, her holding could be halved.
O'Leary also notes that the heads of the major agencies — such as Publicis' Saatchi & Saatchi and Leo Burnett; and Omnicom's TBWA, DDB and BBDO — were not told of the merger talks as they were happening.
David Jones, CEO of rival network Havas Worldwide, has questioned the deal, saying it will not be in the best interest of clients because the new behemoth might be more bureaucratic and less nimble.