Omnicom and IPG in advanced merger talks

Omincom is reportedly in advanced talks to acquire Interpublic Group (IPG) in a deal that would create the largest advertising and marketing services firm in the world.

The Wall Street Journal broke news of the deal on Sunday Dec. 8, and reported that a transaction could be announced as early as the coming week.

Terms of the deal have not been disclosed, but the all-stock merger would value IPG at between $13 billion and $14 billion excluding debt, WSJ reported.

The combined company would have revenues of more than $20 billion, based on 2023 figures, unseating Publicis and WPP as the world’s largest holding companies.

The move, which would bring iconic ad agencies McCann, BBDO, TBWA, DDB and FCB under one roof, as well as media buying firms Omnicom Media Group and IPG Mediabrands, comes in response to growing pressures facing the traditional holding company model.

Ad agencies and holding companies are under pressure as data, technology and AI transform the way marketers work. WSJ’s report pointed to a Forrester study from last year which found that automation could eliminate more than 33,000 jobs from the ad industry by 2030, or 8% of the industry’s workforce.

Despite acquiring data firm Acxiom in 2018 for more than $2 billion, IPG’s revenues dipped nearly 3% in the third quarter, while peers like Publicis Groupe, which posted 5.8% growth in the third quarter, have out-performed

IPG CEO Philippe Krakowsky has been shopping pieces of IPG’s portfolio, starting by selling agencies Deutsch New York and Hill Holliday to a private equity firm in January. Last week, IPG sold digital agency Huge to AEA Partners. R/GA is also up for sale.

Omnicom’s bid for IPG comes a decade after the holding company’s failed merger with Publicis in 2014. A merger between IPG and Omnicom would likely to face government scrutiny, given the dominance a combined entity would have over the industry.