Omincom is in advanced talks to acquire Interpublic Group (IPG) in a deal that would create the world’s largest advertising and marketing services company.
Sunday (Dec. 8), The Wall Street Journal announced the news of the agreement and indicated that a transaction could be announced as early as this week.
Terms of the deal were not disclosed, but merging all shares would value IPG at between $13 billion and $14 billion excluding debt, the Journal reported.
The combined company would have revenue of more than $20 billion, based on 2023 figures, displacing Publicis and WPP as the world’s largest holding companies.
The move, which would bring iconic advertising agencies McCann, BBDO, TBWA, DDB and FCB, as well as media buying companies Omnicom Media Group and IPG Mediabrands, under one roof, responds to the growing pressures facing the model traditional holding company.
Advertising agencies and holding companies are under pressure as data, technology and AI transform the way marketers work. The Journal’s report references a Forrester study from last year that found automation could eliminate more than 33,000 advertising industry jobs by 2030, or 8% of the advertising workforce. the industry.
This merger also responds to the performance of Publicis Groupe. The company managed to outpace its peers after spending billions of dollars on companies that better positioned it in technology, data and digital transformation. The holding company shows growth of 5.8% in the third quarter, with revenues of $3.72 billion.
Despite acquiring data company Acxiom in 2018 for more than $2 billion, IPG has struggled to keep pace, and revenues fell almost 3% in the third trimester.
IPG CEO Philippe Krakowsky has purchased parts of the IPG portfolio, starting with selling agencies Deutsch New York and Hill Holliday to a private equity firm in January. Last week, IPG sold digital agency Huge, which was weighing on its portfolio, to AEA Partners. R/GA is also for sale.
Omnicom’s bid for IPG comes a decade after the holding company’s failed merger with Publicis Groupe in 2014. The deal is likely to face government scrutiny, given the dominance what an IPG/Omnicom combination would have on the sector.
