July 26 Publicis Groupe SA and Omnicom
Group Inc are in late-stage merger talks to create what
would be the world's largest advertising group, Bloomberg
reported, citing a person with knowledge of the matter.
The deal, which the report said is likely to be structured
as a merger of equals, would combine Publicis agencies such as
Leo Burnett Worldwide and Saatchi & Saatchi with Omnicom's BBDO
Worldwide and DDB Worldwide.
If the companies do combine, it would create the world's
largest advertising company with a market value of more than $30
billion, overtaking current leader WPP. Publicis and
Omnicom are each worth more than $16 billion.
Bloomberg, however, reported that the talks could still
New York-based Omnicom and Paris-based Publicis were not
immediately available for comment.
The combination would represent the largest tie-up to date
among advertising agencies, which have seen little consolidation
in recent years. It would top Japanese firm Dentsu Inc's
$4.9 billion purchase of Aegis Group in March.
The merged company would become the largest agency player in
a global advertising market expected to grow 3.5 percent this
year to $505 billion, according to a forecast from Zenith
Optimedia, a research firm that is owned by Publicis.
Combining the firms could help them compete more
aggressively for new business by bringing together the
strengths of each in creative campaigns and media buying and
planning, Wedbush Securities analyst James Dix said.
The new firm also may be better positioned to compete in
fast-growing markets such as Brazil, China and Russia, he said.
"There is a certain logic to it for geographic purposes,"
If they do merge, "all in one swell swoop, suddenly they
become a much larger scale player in a lot of these emerging
The sheer size of the deal could draw scrutiny from
antitrust authorities, Dix said, but added he was not aware of
an agency merger that had been blocked by regulators.
Omnicom shares were up about 3 percent in trading after the
bell. They closed at $65.11 on the New York Stock Exchange on
Publicis' shares closed up 1.5 percent at 59.35 euros on