UPDATE, 1:00 PM: Looks like it’s a done deal, with an announcement planned for Sunday in Paris, The Wall Street Journal says. The new entity will be called Publicis Omnicom Groupe. The partners’ current CEOs — Omnicom’s John Wren and Publicis’ Maurice Levy — will be co-CEOs. One of the first challenges: sorting through potential client conflicts including Coke and Pepsi.
PREVIOUS, 9:56 AM: Major TV network owners including CBS, Viacom, and Discovery will be watching this one closely: The two ad companies, which together account for about 40% of U.S. sales, are in “late-stage merger talks,” Bloomberg reports citing someone “with knowledge of the situation.” The deal would be structured as a merger of equals to create the world’s largest ad company with a market value of more than $30B. The plan has “significant industrial logic to it, and thus shouldn’t be ruled out as plausible,” says Pivotal Research Group analyst Brian Wieser. The combined company could raise its fees because it would face less competition, the thinking goes. Omnicom’s properties include BBDO Worldwide, TBWA Worldwide and DDB Worldwide Communications Group and its client base includes household names such as Apple, McDonalds, Johnson & Johnson, Volkswagen, and ExxonMobil. Paris-based Publicis has Publicis Worldwide, Leo Burnett Worldwide and DigitasLBi with clients including AllState, AT&T, Citigroup, CocaCola, Comcast, Fox, Kellogg’s, and Samsung. Antitrust officials in the U.S. and in Europe likely would take a dim view of a merger, which is why Wieser says the transaction “is unlikely to occur.” The combined company could account for as much as two-thirds of revenues for heavily ad-dependent networks, and would be twice as big as its closest rival, WPP. What’s more, Publicis is one of the most important companies in France which is “famously known for protecting national champions,” the analyst says.
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