The two companies could announce as soon as Monday that Omnicom plans to buy Interpublic in an all-stock deal that could value Interpublic at between $13 and $14 billion without debt, according to a person familiar with the situation.
Thank you for reading this post, don't forget to subscribe!The agreement will strengthen Omnicom’s position among the handful of large holding companies that dominate the sector, but the industry’s best-known products – spectacular TV commercials and print ads are seen as less effective at boosting consumer buying and feedback, as they are struggling to develop new sources of revenue.
Omnicom is known for its long-standing relationships with blue-chip marketers such as PepsiCo and Apple, and has entities such as BBDO, TBWA Worldwide, and Omnicom Media Group. Although it is rarely seen as opening new frontiers in digital practices, it struck a deal in January to buy Flywheel, a specialist in digital commerce.
In a research note released Sunday, Brian Weisser, an industry analyst, said, “There is tremendous industrial logic behind the merger of two large agency groups. In addition to cutting back-office costs, “the removal of a significant globally competent agency group will help improve competitive mobility in favor of all agencies,” he added.
After decades of integration on Madison Avenue, the deal will bring some of the world’s best-known advertising brands under one roof. A handful of groups are powerful players behind most of the commercials that people see on TV sets before they appear on YouTube clips and roadside billboards. In addition to creating ads, companies also have firms that buy ad space, develop loyalty programs, analyze shoppers’ data, handle crisis communications, and attract influencers for marketing campaigns.