Home Advertising Ad world giants agree to $35 billion merger

Ad world giants agree to $35 billion merger

Omnicom Group Inc., the New York City-based holding company whose advertising and marketing agencies include Steiner Sports L.L.C. in New Rochelle, Sunday announced it will merge with Paris-based Publicis Groupe SA.

The new 130,000-employee company, Publicis Omnicom Group, will have a combined equity market capitalization of about $35.1 billion. The merger deal, expected to close in the fourth quarter this year or first quarter of 2014, will create the world’s largest company in communications, advertising, marketing and digital services, with combined revenue last year of $22.7 billion.

Omnicom Group CEO John Wren and Publicis Groupe Chairman and CEO Maurice Levy will lead the company as co-CEOs through the first 30 months, after which Levy will become non-executive chairman and Wren will continue as CEO.

Bruce Crawford, current chairman of Omnicom, will be non-executive chairman of Publicis Omnicom Group for the first year. In the second year of the merger, Publicis Groupe Chairperson Elisabeth Badinter will take over as non-executive chairperson.

In a joint press release, the merging companies said the new company’s broader portfolio of agencies and services and deeper geographic footprint will allow it to accelerate revenue growth and create operating synergies that generate efficiencies of $500 million.

The new holding company will be registered in the Netherlands. The group’s operational head offices will continue to be based in New York and Paris.

After special dividends, shareholders of Publicis and Omnicom will each hold about 50 percent of the equity of Publicis Omnicom Group.

Publicis Groupe shareholders will receive one newly issued ordinary share in the new company for each Publicis Groupe share they own, in addition to a special dividend of $1 per share.

Omnicom shareholders will receive .813 newly issued ordinary shares in the new company for each Omnicom share they own, together with a special dividend of $2 per share. Omnicom shareholders also will receive up to two regular quarterly dividends of 40 cents per share if declared prior to the deal closing.

Omnicom Group in 2000 acquired Steiner Sports Marketing and Memorabilia in a deal reportedly valued at $25 million.

 

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