It was the talk of the global ad world across Sunday and Monday, thanks to a report in The Wall Street Journal. Ahead of the Opening Bell for U.S. financial markets, official word came from the two companies that are giants in the marketing and creative space.
Omnicom and The Interpublic Group of Companies, each of which are publicly traded on the NYSE, will be merging, thanks to the unanimous approval of an stock-for-stock transaction by each of their boards of directors.
“The combined company will bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform,” Omnicom said in an announcement released midday Monday, London time. “Together, the companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients.”
Under the terms of the agreement, Interpublic shareholders will receive 0.344 Omnicom shares for each share of Interpublic common stock they own. Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis.
The transaction is expected to generate annual cost synergies of $750 million, Omnicom says. Furthermore, “The new Omnicom will have over 100,000 expert practitioners. The company will deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.”
John Wren will remain Chairman/CEO of Omnicom, while Phil Angelastro retains his position as EVP/CFO.
Interpublic CEO Philippe Krakowsky and Chief Operating Officer Daryl Simm will serve as Co-Presidents and COOs of Omnicom. Krakowsky will also be Co-Chair of the Integration Committee post-merger. Three current members of the Interpublic Board of Directors, including Krakowsky, will be welcomed to the Omnicom Board of Directors.
Wren commented, “This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth. Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.”
Krakowsky added, “This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network. Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data. By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that’s changing at speed. We look forward to working with John and the entire Omnicom team.”
Following the merger, Omnicom believes it will have “an attractive pro forma financial profile”:
- Combined 2023 revenue of $25.6 billion, Adjusted EBITA of $3.9 billion and free cash flow of $3.3 billion
- Combined 2023 revenue of 57% U.S. and 43% International
- Strong balance sheet, commitment to investment grade rating with combined debt to EBITDA ratio of 2.1x before the benefit of synergies
Both Omnicom and Interpublic will maintain their current quarterly dividend through the closing of the transaction.
The stock-for-stock transaction is expected to be tax-free to both Omnicom and Interpublic shareholders and is expected to close in the second half of 2025, subject to Omnicom and Interpublic shareholder approvals, required regulatory approvals, and other customary conditions.
The combined company will retain the Omnicom name and trade under the OMC ticker symbol on the New York Stock Exchange.
PJT Partners is serving as financial advisor to Omnicom. Latham & Watkins LLP is serving as legal advisor to Omnicom. Morgan Stanley is serving as financial advisor to Interpublic. Willkie Farr & Gallagher LLP is serving as legal advisor to Interpublic.
