ADWEEK House will be in Las Vegas starting January 8! Our venue is your place to relax, energize, and connect during the biggest moment in consumer technology. Confirm your attendance. Omnicom is in negotiations to take over Interpublic Group (IPG) in a transaction that would result in the largest advertising and marketing services organization globally. […]
ADWEEK House will be in Las Vegas starting January 8! Our venue is your place to relax, energize, and connect during the biggest moment in consumer technology. Confirm your attendance.
Omnicom is in negotiations to take over Interpublic Group (IPG) in a transaction that would result in the largest advertising and marketing services organization globally.
On Sunday (Dec. 8), The Wall Street Journal reported on the potential deal and indicated that an announcement could be made as soon as this week.
Details of the agreement remain undisclosed, but the all-stock merger is projected to value IPG between $13 billion and $14 billion, excluding debt, according to The Journal.
The merged entity would generate revenues exceeding $20 billion, based on 2023 estimates, surpassing Publicis and WPP as the leading holding companies worldwide.
This initiative, which would unite storied advertising agencies such as McCann, BBDO, TBWA, DDB, and FCB, alongside media buying divisions Omnicom Media Group and IPG Mediabrands, is a reaction to the mounting challenges faced by traditional holding company models.
Advertising agencies and holding firms are experiencing pressures as data, technology, and AI reshape marketing operations. The Journal referred to a Forrester report from the previous year, revealing that automation could potentially remove over 33,000 jobs from the advertising sector by 2030, approximately 8% of the total workforce within the industry.
The merger is also a response to the advances made by Publicis Groupe. The company has gained an edge over its competitors after investing billions into businesses enhancing its technology, data capabilities, and digital transitions. The holding company reported a 5.8% growth in the third quarter, with earnings amounting to $3.72 billion.
Despite its acquisition of data firm Acxiom in 2018 for over $2 billion, IPG has struggled to keep pace, and revenues fell nearly 3% in the third quarter.
IPG CEO Philippe Krakowsky has been divesting parts of IPG’s assets, beginning with the sale of agencies Deutsch New York and Hill Holliday to a private equity firm in January. Recently, IPG sold digital agency Huge, which had been a burden on its portfolio, to AEA Partners. R/GA is also available for acquisition.
Omnicom’s interest in IPG comes a decade after the holding company’s attempt to merge with Publicis Groupe in 2014 failed. The proposed deal is expected to attract regulatory scrutiny due to the substantial influence a combined IPG/Omnicom would hold within the industry.
