* Deal to be presented as merger of equals - source
* Publicis to hold news conference at 1200 GMT on Sunday
By Leila Abboud and Paritosh Bansal
PARIS/NEW YORK, July 27 French advertising group
Publicis will soon announce a plan to combine with
larger rival Omnicom in a deal that will be presented as
a merger of equals and could include shared management, a person
familiar with the situation said.
Publicis said on Saturday that it plans to make a "major
corporate announcement" on Sunday at a media briefing at 1200
GMT at its Paris headquarters, without giving further details.
If Publicis and Omnicom merge, the world's second- and
third-largest ad groups would overtake current leader WPP
. The new powerhouse would have a market capitalisation
of around $30 billion and annual sales of around $23 billion.
It would bring together Publicis brands such as Saatchi &
Saatchi and Leo Burnett with Omnicom's BBDO Worldwide and DDB
The deal would not be without risks as it would likely face
scrutiny from antitrust regulators because of the power the new
company would wield in the ad buying world by spending roughly a
combined $100 billion a year, or 20 percent of the global media
And major customers could balk at the agencies having
conflicts if they also work for competing firms.
The deal, first reported by Bloomberg on Friday, would
reshape the competitive dynamics of the advertising industry at
a time when the rise of Internet marketing is leading to rapid
changes in how big companies hawk products and hone their image.
To cope, the big five ad agencies have spent billions of
dollars in recent years to expand in emerging markets from
Brazil to China and scoop up digital marketing companies.
Omnicom had a market capitalisation of $16.8 billion at the
close of trading on Friday, while Publicis was valued at 12.5
billion euros ($16.6 billion).
Omnicom is also larger in revenue terms, posting $14.22
billion in sales last year against $8.76 billion for Publicis.
Publicis was founded in 1926 by Marcel Bleustein in Paris
after he left his job as a salesman at his family's furniture
shop, with the company moving to the Champs Elysees 20 years
A successful deal with Omnicom would be a crowning
achievement for Publicis Chief Executive Maurice Levy and
Elisabeth Badinter, the daughter of Publicis' founder. Badinter
is the group's largest shareholder with a 9.1 percent stake and
also serves as board chairman.
Levy has turned Publicis into a global force during his 26
year tenure largely through savvy deal-making and a prescient
push into Internet and digital marketing.
The group had an operating margin of 16.1 percent last year.
North America accounted for almost half of revenue, and 37
percent of sales came from digital marketing.
Founded in 1986, Omnicom generated just over half of its
revenue in its domestic market last year.
Publicis spokeswoman Peggy Nahmany did not return requests
for comment on Saturday. Omnicom was not immediately available