Omnicom is set to announce that it has reached an agreement to acquire Interpublic Group (IPG) in a deal that will create the world’s largest advertising agency group, followed by current leaders Publicis Groupe and Ogilvy-owner WPP. The two companies are expected to highlight their “complementary” assets and cultures in a formal statement to the U.S. stock market, as per a Campaign report, which also stated that Omnicom’s CEO John Wren will assume the role of chief executive for the combined entity. A transaction could be announced as early as this week.
The announcement comes more than a decade after Omnicom attempted, but ultimately failed, to merge with Publicis Groupe in a $35 billion deal that collapsed in 2014 due to disagreements over terms.
As reported in the trade publication, Philippe Krakowsky, IPG’s current CEO, is expected to be named co-president, alongside Daryl Simm, Omnicom’s president and COO. Additionally, Krakowsky and two other senior IPG executives are expected to secure seats on the new board.
The deal is expected to give the combined company a market capitalization exceeding $30 billion, as per reports. Omnicom, valued at $20 billion, is reportedly set to pay between $13 billion and $14 billion for IPG, which is valued at roughly $11 billion, according to The Wall Street Journal.
The advertising landscape is undergoing significant disruption, with pressure on business exacerbated by big tech’s dominance on the ad market, media fragmentation and clients who are turning to in-housing, AI-powered tools and digital platforms for cost-effective solutions. Traditional agencies are also facing stiff challenge from firms outside the holding companies’ stables, leading many to cut rates in a race to the bottom.
Omnicom’s portfolio includes three global advertising agency networks – BBDO, DDB and TBWA – as well as a global media network, Omnicom Media Group, which is composed of three providers of media services: OMD, PHD and Hearts & Science. Omnicom also manages a global diversified group of agencies under the DAS Group of Companies, which is comprised of: the Health Group, the Precision Marketing Group, the Commerce Group and the Advertising Collective. In 2021, it created the Communications Consultancy Network (CCN) comprised of Omnicom Public Relations Group – with agencies including FleishmanHillard, Ketchum, Marina Maher Communications, Porter Novelli and more. Omnicom has 75,900 people worldwide connected by the parent entity and IPG had 57,400 by the end of 2023.
IPG global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Initiative, IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Global, Octagon, R/GA, UM, Weber Shandwick and more. IPG is an S&P 500 company with total revenue of $10.89 billion in 2023. IPG recently sold digital company Huge to private equity firm AEA Investors.
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