Omnicom becomes biggest advertising company
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Illustration: Aïda Amer/Axios
Omnicom announced on Wednesday its long-awaited $13 billion acquisition of rival Interpublic Group (IPG) has finally closed, following regulatory approval in Europe.
Why it matters: The deal creates the largest ad holding group globally and is likely to usher in more consolidation in an era defined by scale, data and AI.
Driving the news: The all-stock deal gives Omnicom shareholders 60.6% of the combined company and IPG shareholders' 39.4%. The combined company will now trade under the ticker OMC on the New York Stock Exchange.
- "With the completion of the deal, Omnicom is setting a new standard for modern marketing and sales leadership," CEO John Wren said in a statement.
The big picture: The deal underscores the pressures in the ad industry and need for industry consolidation.
- With IPG, Omnicom can make bigger platform investments, secure more major commercial deals, deepen generative AI partnerships and strengthen its creative talent.
Catch up quick: The European Commission approved the deal on Sunday without any conditions, saying it raised no competition concerns in Europe.
- The UK's Competition and Markets Authority greenlit the acquisition in August, also without any conditions.
The other side: Across the Atlantic, U.S. regulators have been slightly more demanding.
- The Federal Trade Commission in June said it will approve the mega-merger, but only if the agencies agree they won't bar ads based on politics.
State of play: Omnicom's deal is the latest in a sweeping reorganization of the ad industry. Agencies are adapting to the rise of generative AI, self-serve ad buying platforms and other tech changes.
- Legacy holding companies are collapsing brands. WPP, which prior to this merger was the largest ad group by revenue, merged its creative agencies and rebranded its media arm.
- Private equity has been actively acquiring and helping modernize smaller agencies. IPG previously sold two agencies to PE firms — R/GA to Truelink Capital and Huge to AEA. Last week, ZMC-backed agency Wpromote acquired Giant Spoon.
- WPP's U.S.-listed shares soared earlier this month following reports of takeover interest from smaller French agency Havas and PE firms.
