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Publicis and Omnicom scrap merger deal

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Publicis and Omnicom, two of the world’s biggest advertising firms, have abandoned their planned merger which was announced last year.

The pairing would have created the world’s biggest advertising agency with the new company valued at $35.1billion.

The two companies said they called off the deal due to issues which “remained to be overcome” and the slow  progress could be be “detrimental” to both businesses.

The deal was announced in a statement by Omnicom’s chief executive, John Wren, and Publicis CEO, Maurice Levy.

In the joint statement the two chief executives said: “The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders. We have thus jointly decided to proceed along our independent paths.”

The advertising industry is attempting to adapt to the growth of social media platforms such as Facebook and the proposed merger was expected to help the two firms respond to these significant changes.

The firms had said that the deal would help them make savings of around $500m  through pooling their resources and giving them access to a wider range of clients.

The merger might have allowed the new company be able to negotiate better contracts but may simulataneously created conflicts of interest between clients of the two companies as they represented rival firms in many sectors.

The two corporations said they would continue to “remain competitors, but maintain a great respect for one another.”

They agreed to terminate the proposed deal with no break-up fee.

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