Two top ad firms Publicis, Omnicom in merger talks

Two of the world's large advertising firms Publicis Groupe SA and Omnicom Group Inc are in merger talks, which if successful, would create the world's largest advertising group, Bloomberg yesterday reported, citing a person with knowledge of the matter.

With both companies having nearly similar market value, the combination is being billed as a merger of equals.

Paris-based Publicis has a market value of €12.5 billion ($16.6 billion), while New York-based Omnicom has a market capitalisation of $16.7 billion, which will give the merged company a combined market value of around $33 billion.

The merger would also be the first such deal in the advertising industry after Japanese firm Dentsu acquired its British rival Aegis Group last year in a $5-billion deal. (See: Japan's advertising giant Dentsu to buy British rival Aegis for $5 billion).

The proposed Publicis-Omnicom merger will also the largest ever in the global advertising industry, after the 2000 acquisition of Young & Rubicam by London-based WPP Group for $4 billion, and the 2002 acquisition of Bcom3 Inc by Publicis for $3 billion.

The merger would also create the world's largest advertising company, overtaking current leader WPP.

But the huge deal would surely attract scrutiny from global regulators, although they have rarely opposed mergers in the advertising industry, say analysts.

With clients like BBC, Astra Zeneca, Audi, Heineken, Ford, HP and others, Publicis, founded by Marcel Bleustein-Blanchet in 1926, is the world's third-largest advertising group, having operations in 108 countries, employing 60,000 people and generating annual revenues of $8.7 billion.

Founded in 1944, Omnicom is the second-largest advertising group has an international network of more than 1,500 agencies with more than 5,000 clients in more than 100 countries and posted 2012 revenues of $14.2 billion.