Key Points
- Omnicom Group acquires Interpublic Group for $13.25 billion, forming the largest advertising agency globally.
- Interpublic shareholders will receive 0.344 Omnicom shares per share, reflecting a 21.6% premium.
- The merged entity’s annual revenue will exceed $25 billion, surpassing competitors WPP and Publicis.
- The deal is set to close in 2025, with anticipated annual cost savings of $750 million.
Omnicom Group has announced a $13.25 billion all-stock acquisition of rival Interpublic Group, aiming to create the world’s largest advertising agency amidst rising competition from Big Tech and the accelerating adoption of AI in marketing. The deal, unveiled Monday, offers Interpublic shareholders 0.344 Omnicom shares per share held, valuing Interpublic at $35.58 per share—a 21.6% premium to its last close.
Interpublic shares surged nearly 11% following the news, partially recovering from their 10% decline this year, while Omnicom shares dropped by 6%. The merger would bring together Omnicom’s iconic brands like BBDO and TBWA with Interpublic’s McCann, Weber Shandwick, and Mediabrands, creating a company with combined annual revenue exceeding $25 billion based on 2023 figures.
Omnicom CEO John Wren expressed confidence in overcoming regulatory hurdles, citing competition from tech giants like Google, Facebook, and Amazon, which dominate advertising through advanced tools and platforms. The Biden administration’s perceived pro-business stance may also ease approval. However, concerns linger due to the failure of Omnicom’s $35 billion merger with Publicis in 2013 due to antitrust issues.
The merger positions the combined entity to better compete with industry leaders like the UK’s WPP and France’s Publicis while responding to the growing influence of AI in advertising. Both companies have faced challenges as AI tools drive down advertising costs, pressuring traditional agencies to innovate.
Omnicom shareholders will hold a 60.6% stake in the new company, which Wren will lead. Interpublic CEO Philippe Krakowsky and Omnicom’s Daryl Simm will serve as co-Chief Operating Officers. The deal, expected to close in late 2025, is projected to generate $750 million in annual cost savings.
