Advertising companies Publicis and Omnicom merge - share prices rise
The planned merger of Publicis and Omnicom to form the world's largest advertising group already gave the two companies' stock prices a significant boost on Monday. At the same time, the merger plans have fueled speculation about takeovers in the media industry.
Publicis shares gained 6.4 percent after the resumption of trading in Paris, leading the CAC40 index. In New York, Omnicom shares climbed 7.2 percent to $69.78. In the media industry, plans for a merger also fueled takeover fantasies. The European sector index rose one percent. The French Publicis and the U.S. Omnicom had made their merger plans public on Sunday. The new Publicis Omnicom Group, with more than 130'000 employees, would have annual sales of around 18 billion euros, replacing WPP as the world leader in the advertising industry. The deal is expected to close at the end of this year or early next year.
However, the competition authorities still have to give their approval, which is not a foregone conclusion, at least in the USA. The merger will bring such well-known advertising and PR agencies as BBDO, Saatchi & Saatchi, Leo Burnett, Ketchum and Fleishman-Hillard under one roof. The merger could put further pressure on the media industry, some of which is already beleaguered. The sheer size and global reach of the new company could help its clients get lower prices for campaigns on television, the Internet, and in newspapers and magazines.
The shareholders of both sides are to hold around half of the shares in the Publicis Omnicom Group. The new group will be based in the Netherlands, but its headquarters will remain in Paris and New York. Publicis chief Maurice Levy and Omnicom chief John Wren will lead the group as equal chiefs. (SDA)
Teaser image: Marketingmagazine.co.uk
