Omnicom has agreed a deal to acquire Interpublic to create the world’s biggest agency group, the two companies have formally announced to the US stock market.
The two agency groups said their respective boards of directors had unanimously approved the all-stock transaction and hailed their “complementary” assets and cultures in a joint statement.
They said the combined group will create the “premier marketing and sales company” in the world, with well over 100,000 staff.
The two groups had combined revenue of $25.6bn in 2023 – with 57% from the US and 43% from the rest of the world.
Omnicom and IPG expect to make $750m in “annual cost synergies”. There was no immediate word on where the cuts may fall.
The combined company is expected to have a stock market capitalisation of over $30bn. Omnicom was valued at $20bn and IPG at about $11bn prior to the deal, although the exact amount that Omnicom was paying was not immediately clear.
It is thought that Omnicom is paying a premium of about 21.6% for IPG, based on the closing share price of the two companies on Friday 6 December, the last trading day before the announcement. That would value IPG at more than $13bn.
“Under the terms of the agreement, Interpublic shareholders will receive 0.344 Omnicom shares for each share of Interpublic common stock they own,” the companies said.
Omnicom was trading at $103.42 per share before the announcement. Since IPG shareholders will receive 0.344 of Omnicom stock per share, that is equivalent to $35.58 for each IPG share versus $29.26 prior to the deal.
The companies added: “Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis.”
The deal is expected to close in the second half of 2025, the companies said.
John Wren, the chairman and chief executive of Omnicom, said: “This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms 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. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.”
Philippe Krakowsky, chief executive of Interpublic, said: “This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network.
“Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data. 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. We look forward to working with John and the entire Omnicom team.”
Highlights of transaction focus on shared values and technology and data
The two companies listed five “transaction highlights” as:
1) “Highly complementary assets create an unmatched portfolio of services and products that expands client opportunities for each company on day one.
2) “Omnicom and Interpublic share highly complementary cultures and core values, including a foundational belief in the power of ideas enabled by technology and data.
3) “Creates an industry-leading identity solution with the most comprehensive understanding of consumer behaviours and transactions, enabling us to deliver superior outcomes for our clients at scale and speed.
4) “Advances our ability to continually innovate and develop new products and services, providing higher ROI on marketing spend.
5) “Significant free cash flow provides greater capacity for internal investments and acquisitions.”
The new leadership team will see Wren remain as chairman and CEO of Omnicom.
Krakowsky becomes co-president and chief operating officer, alongside Daryl Simm, who already holds the same role at Omnicom and will also become co-president and co-COO.
Krakowsky will also be co-chair of the integration committee post-merger, the companies said.
Three current members of IPG board, including Krakowsky, will join the Omnicom board.
Ian Whittaker, founder of Liberty Sky Advisers, who is a financial analyst and writes the Investor View column for Campaign, said the combination of Omnicom and IPG will be likely to shake up the agency sector, as it creates a clear number one ahead of Publicis Groupe and WPP.
“If the deal goes through – which is not guaranteed for all the usual reasons, including regulatory – then the implications are obviously very significant, but I do not think, by itself, it will change the dynamics of the industry,” he said.
He added: “The big overlap between the two is in creative, not in media where IPG is a relative minnow, especially after the loss of the global Amazon account.”
More details to follow.
