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Omnicom and Interpublic are negotiating a merger in a deal worth more than $30 billion that would create the world’s largest advertising agency and reshape the global marketing industry.
The combined US group would likely overtake France’s Publicis and Britain’s WPP, which have been vying for the top spot as the industry’s largest holding company based on net income.
The all-stock deal is structured as a takeover of Interpublik by its larger competitor, Omnicom. Interpublic was worth $10.9 billion at the close of trading on Friday, while Omnicom was valued at $20.2 billion. The combined group would have net income of more than $20 billion.
Interpublic and Omnicom own a wide array of global advertising, marketing and PR agencies, with McCann, FCB and Mediabrands on the one hand and BBDO and TBWA on the other, although both agencies are focused on the US.
One person familiar with the situation said that the talks started already this summer. He added that the deal could be announced as early as Monday. It was effectively “Omnicom’s takeover of Interpublic, even if it’s presented as a merger – IPG has been looking to find a buyer for some time,” he said.
Another person close to the situation also confirmed the talks on Sunday night. The proposed deal was first reported by the Wall Street Journal. Omnicom and Interpublic were not immediately available for comment.
The deal is expected to attract significant regulatory scrutiny given the overlap in media and creative agencies, one of the people said.
It comes at a time when traditional ad agencies are facing increasing pressure, and most of the money in the industry is now being siphoned off by big tech companies like Google and Amazon that offer advertising tools as well as a marketplace for buying and selling digital ads.
Publicis has outperformed its rivals over the past year, making early investments in data-driven services, including the acquisitions of digital groups Sapient in 2015 and Epsilon in 2019 to bolster its technology platforms.
The industry is also facing significant upheaval due to the introduction of AI tools, which offer companies the opportunity to build cheaper, faster and with better targeting than ever before.
All agencies must invest hundreds of millions of dollars in developing AI tools to help them face the existential threat of new technology as clients can more easily start their own marketing.
The deal is the largest proposed in the industry since the merger of Publicis and Omnicom in 2013, which would also create the world’s largest advertising group. However, after several months of negotiations, the deal was terminated.
