Advertising giant Omnicom buys rival Interpublic Group to take on tech giants

Advertising behemoth Omnicom has confirmed it will acquire rival Interpublic Group to create a more significant adversary to take on the global tech platforms.

Omnicom chairman & CEO John Wren and Interpublic Group CEO Phillipe Krakowsky.

Omnicom has confirmed it will acquire Interpublic Group for US$13.25 bn in a move that will create the world’s largest advertising group.

The deal will see the third-largest advertising and marketing services group, Omnicom, merge with the fourth largest, Interpublic Group, to create a greater adversary to the increasingly challenged advertising industry. The advertising business is facing significant competition from the tech platforms and the rising use of AI and automated technology, in addition to declining client budgets.

The move brings together Omnicom brands including TBWA, BBDO and OMD with Interpublic Group’s McCann, Initiative and Weber Shandwick, among a suite of others, to offer end-to-end services across media, marketing, CRM, data, digital commerce, public relations, healthcare, branding and advertising.

The combined business will continue to compete with advertising giants WPP and Publicis.

Under the terms of the deal, Interpublic investors will receive 0.344 Omnicom shares for each share held. Omnicom shareholders will own 60.6 per cent of the combined company while Interpublic investors will own 39.6 per cent.

Omnicom chairman & CEO John Wren said the deal creates “significant value” for investors.

“By combining world-class, highly complementary data and technology platforms [Omnicom is] enabling new offerings to better serve our clients and drive growth.,

“Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes.”

Mr Wren will remain chairman & CEO of Omnicom and EVP & CFO Phil Angelastro will also remain in his role.

Interpublic Group CEO Philippe Krakowsky will become co-president and co-chief operating officer of Omnicom alongside Daryl Simm, who currently holds these roles at Omnicom.

Mr Krakowsky will also be co-chair of the Integration Committee post-merger and will join the Omnicom board, along with two other Interpublic board directors.

Mr Krakowsky said of the deal, “By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that’s changing at speed.”

The acquisition follows an internal restructuring within Omnicom, which saw the establishment of Omnicom Advertising Group (OAG) to house its advertising brands globally. This group now sits alongside Omnicom Media Group (OMG), which houses the media brands.

Both of the groups are currently without an Australian lead, with OMG Australia and New Zealand CEO Peter Horgan set to depart the role mid-way through next year and no replacement yet named. OAG is yet to announce a local or regional structure, however, OAG global CEO Troy Ruhanen told The Australian earlier this year that announcements would be in place by the start of 2025. In light of the merger it is now uncertain if this will still be the case.

The Interpublic Group sale follows its sell-off of a number of advertising businesses, including creative consulting business Huge, which it sold to global private equity firm AEA Investors last week. Earlier this year, IPG sold creative advertising businesses Hill Holiday and Deutsch New York to Attivo Group. The New Zealand-based marketing services group already owns former IPG business 303 MullenLowe and part-owns Mediahub Australia.