Julian Porras on the Publicis-Omnicom merger: “This is a win for our clients and employees”

Publicis Group and Omnicom have agreed to merge and the combined company is expected to be called Publicis Omnicom Groupe. Consolidation of advertising agencies is being driven by growth opportunities in emerging markets such as Latin America (particularly Brazil) Russia, India and China to offset weak growth elsewhere. "Particularly in a fast growth region like Latin America, the merger brings unparalleled depth of resources to advance our client needs and opens enormous possibilities for our talent", Julián Porras, CEO Latin America, Omnicom Media Group, tells Portada.

Publicis Omnicom Groupe Publicis Group and Omnicom have agreed to merge and the combined company is expected to be called Publicis Omnicom Groupe. On Sunday, New York based-Omnicom Group and Paris-based Publicis Groupe announced they would combine in a "merger of equals" that has a market cap of $35 billion. The company will be called Publicis Omnicom Group and be led by Omnicom CEO John Wren and Publicis CEO Maurice Levy.  They will be co-chief executives.

Particularly in a fast growth region like Latin America, the merger brings unparalleled depth of resources to advance our client needs and opens enormous possibilities for our talent.

Consolidation of advertising agencies  is being driven by growth opportunities in emerging markets such as  Latin America (particularly Brazil) Russia, India and China  to offset weak growth elsewhere. "Particularly in a fast growth region like Latin America, the merger brings unparalleled depth of resources to advance our client needs and opens enormous possibilities for our talent",
Julián Porras, CEO Latin America, Omnicom Media Group, tells Portada.

Porras adds that " I believe it will help us get to the future faster and provide scalable solutions with more speed, while protecting at all times client confidentiality through separation.  We will of course remain respectful of the essence and positioning of our Agency Brands.  This is a win for our clients and employees."

The merger brings together well-known ad firms such as Omnicom's BBDO Worldwide, TBWA Worldwide and DDB Worldwide with Publicis' Saatchi & Saatchi and Leo Burnett. The new company will have more than 130,000 employees. The deal could close as soon as the fourth quarter, Publicis and Omnicom said in a joint statement. The combined company is expected to be listed on the New York Stock Exchange and Euronext Paris under the symbol OMC. Revenue for both firms was $22.7 billion in 2012.

Publicis Omnicom Group have some of the world's largest advertising clients including, Johnson & Johnson, Mars, McDonald's, Pfizer, Procter & Gamble. Potential for conflicts could arise between the new holdings Advertising Agencies  for clients including Pepsi and Coca-Cola, AT&T, Sprint, T-Mobile and Verizon.

"For many years, we have had great respect for one another as well as for the companies we each lead," said Messrs. Levy and Wren. "This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders."

Efficiency Gains

The merged holding is also aiming for US$500 million in savings due to efficiency gains.  To achieve this savings the companies are likely going to require consolidation of real estate, companies and possible headcount elimination. In their Sunday conference call the Publicis and  Omnicom Group CEO's declined to explain how those cost-savings will be achieved.


Editorial Staff (@portada_online)

Portada is the leading source of news and analysis on the Latin Marketing and Media space. Credibility is our biggest asset: The Portada team is very passionate about producing high-quality independent content that helps drive forward the Latin Marketing and Media space.
El equipo editorial de Portada se apasiona por elaborar contenidos de alta calidad. La credibilidad es nuestro mayor activo. La misión de Portada es ayudar a profesionales de negocios y medios a comprender y alcanzar a consumidores latinoamericanos, del mercado hispano de EE UU y España.

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