April 25 A merger of Omnicom Group Inc,
the No.1 U.S. advertising company, and French rival Publicis
Groupe SA has hit a roadblock following disagreements
over terms of the deal, the Wall Street Journal reported Friday,
citing people with knowledge of the situation.
Last July, both companies announced the proposed $35 billion
merger that would overtake WPP Plc as the world's
largest advertising company.
The companies have essentially not agreed on who will be the
legal acquirer, which is delaying crucial paperwork with the
U.S. Securities and Exchange Commission, according to the
Despite both companies owning 50 percent of the new entity,
technically one has to acquire the other for accounting reasons.
Omnicom and Publicis have stopped meetings of about 70
integration committees, where they present their networks,
teams, organization, the Journal said, citing sources. (link.reuters.com/nax78v)
The companies are also unable to agree on the filling of
senior posts in the to-be-created advertising behemoth,
particularly the position of chief financial officer.
Omnicom wants its finance chief Randall Weisenburger to be
the new CFO of the merged entity, while Publicis is backing CFO
Jean-Michel Etienne for the job, the Journal reported.
Omnicom and Publicis could not be reached for comment
outside regular business hours in the United States and France.
The instability surrounding the merger has benefited rival
WPP, which posted a much better-than-expected first-quarter
revenue growth on Friday, helped by a surge in new clients
linked to the merger.
"I think the best result for us, frankly, would be for the
deal to go ahead with joint CEOs, you know, fighting with one
another about who's running the company," WPP chief Martin
Sorrell said in a Reuters Insider interview following the
Sorrell said that people he spoke with have said there's a
third to 50 percent probability that the deal will not go
Legal and tax issues are also adding to the conflicts
related to the merger. Omnicom on Tuesday said it was unable to
predict when the deal would close, following uncertainty over
approval from antitrust authorities in China, a big market for
Publicis, and for establishing tax residency in the United
Both companies will have to get approvals from the revenue
and customs authority in the United Kingdom and the finance
ministry of the Netherlands, where the new British company will
Tax approval from France is also pending, Omnicom has said.
(Reporting by Sampad Patnaik and Aman Shah in Bangalore;
Editing by Lisa Shumaker)