Publicis, Omnicom to create world's biggest ad firm

Publicis Groupe SA and Omnicom Group Inc said on Sunday they plan to merge in a deal that would create the world's biggest advertising group, worth USD 35.1 billion.

The transaction - presented as a merger of equals - would bring the necessary scale and investment firepower to cope with rapid changes wrought by technology on the advertising business. Also read: Ad firms Publicis, Omnicom in merger talks: Report Here is what the combined company would look like, including recent news on both companies: The new company will operate under the name Publicis Omnicom and trade in New York and Paris. It will have combined revenue of USD 23 billion and 130,000 employees. Omnicom Chief Executive John Wren and Publicis CEO Maurice Levy will jointly lead the new company for the first 30 months, after which Levy will become non-executive chairman and Wren will become CEO.The new holding company will be located in the Netherlands. Maurice Levy, CEO of Publicis Groupe said, "We have done a lot of deals but this one has a lot of reason to exist. The most important one is that it is excellent combination for our clients. We have to think first about the clients or what this new world is creating issues for our clients. We believe that this combination is something which will help them coping with all the changes which are happening in this world". Jon Wren, President and CEO of Omnicom said, "Up till 10 years ago it didn’t change very rapidly. You had time to absorb the changes, intellectualise them and re-educate your people. Now changes are instantaneous and this gives the combined resources plus an array of assets that we can service every client need. We will be terribly nimble at the same time in being able to shift to changes in the market place". Omnicom's largest clients on the creative side include McDonald's, Johnson & Johnson, ExxonMobil, AT&T, Microsoft, Apple. Omnicom also works for a number of car companies such as Nissan, Volkswagen and Mercedes. Some of Publicis' biggest clients are Citigroup, Procter & Gamble, Verizon, Google, L'Oreal, General Motors, and Toyota. Potential for conflicts -- Omnicom works for PepsiCo, while Publicis handles Coca-Cola; AT&T at Omnicom and Verizon at Publicis; Microsoft at Omnicom and Google at Publicis. Omnicom's global advertising agencies include BBDO Worldwide, DDB Woldwide and TBWA Worldwide Omnicom's US-based agencies are Arnell, Element 79, Goodby, Silverstein & Partners, GSD&M, Martin/Williams, Merkley + Partners, Roberts + Langer, and Zimmerman Advertising. Publicis-owned global agencies include Leo Burnett Worldwide, Saatchi & Saatchi, Bartle Bogle Hegarty, Fallon Worldwide, Burrell Communications, and Bromley Communications. Omnicom reported a slightly better-than-expected 2.4 percent rise in second-quarter profit to USD 289.5 million, mirroring a similar increase in revenue in its home market. Domestic revenue rose to USD 1.9 billion in the second quarter, accounting for 52 percent of total revenue, as advertising spending in the United States gained momentum. Publicis Groupe showed a 15 percent increase in net profit for the first half of 2013 to USD 412 million, on revenues that were up by 8.7 percent to USD 4.4 billion. Despite the challenge to WPP's top position, the stock has been rising in trade as analysts are confused about the direction of the combined entity formed by Pubilicis and Omnicon. CEO, Martin Sorrell called it a brave move but said the new entity cannot make huge strides in markets apart from the US. (With inputs from Reuters)