Omnicom Group has announced its agreement to acquire Interpublic Group, a move that, if completed, will create the largest advertising company globally by revenue.
The deal would see the third- and fourth-largest advertising giants in the world combine forces, reshaping the landscape of the global advertising industry. This all-stock transaction highlights the increasing trend of consolidation within the sector, particularly as the industry faces technological shifts and evolving client demands.
The merger, valued at approximately $13 billion, will result in a combined entity with a projected revenue of over $25 billion. Omnicom shareholders will own 60.6% of the new company, while Interpublic shareholders will hold 39.4%. The deal comes as both companies navigate challenges in an advertising industry increasingly dominated by digital transformation and artificial intelligence (AI) advancements.
John Wren, Omnicom’s current CEO, will continue in the same role after the merger, while Interpublic’s CEO Philippe Krakowsky and COO Daryl Simm will serve as co-presidents and co-COOs of the combined firm. The deal is expected to close in the second half of 2025.
The advertising industry has undergone significant changes in recent years, with digital channels overtaking traditional media. Tech giants like Meta and Alphabet (Google’s parent company) have expanded their advertising operations, putting pressure on traditional agencies. In response, many of the “Big Four” advertising holding companies, including Omnicom and Interpublic, have adapted by acquiring tech firms and reshaping their business models to focus on digital and AI-driven services.
Omnicom has seen continued success in this transformation, including its recent acquisition of the digital commerce firm Flywheel Digital for $835 million. In contrast, Interpublic has struggled in recent years, losing key clients such as Verizon and BMW, and experiencing flat revenue growth in 2023. Interpublic’s efforts to streamline by selling off underperforming assets, such as the digital agency Huge, reflect its attempt to realign for the future.
This merger between Omnicom and Interpublic is seen as a move to consolidate resources, expand their digital and technological capabilities, and create a more formidable player to compete with rivals like WPP and Publicis Groupe, which are also focusing on digital growth and technology investments.
The combination of these two industry giants will have a significant impact on the global advertising market. It is expected to generate annual cost synergies of $750 million, which could help the new company achieve greater operational efficiencies and market dominance. However, this merger also signals the continued trend of consolidation in an industry under pressure from technological advances and changing client needs.
With the rise of AI, more companies are shifting toward self-serve ad platforms, reducing their reliance on traditional ad agencies. Smaller, tech-savvy agencies are also offering more agile and cost-effective solutions, challenging the traditional model of large agency holding groups. In this environment, the merger between Omnicom and Interpublic may help the combined entity better compete with these new market dynamics.
As with any major merger, the deal could face regulatory scrutiny, particularly in the United States. However, analysts, including Brian Wieser of Madison and Wall, do not anticipate significant antitrust issues, noting that previous merger attempts, such as the failed merger between Omnicom and Publicis in 2013, did not raise major concerns with regulators.
The merger also comes at a time when the US is experiencing leadership changes, with the incoming administration possibly taking a different stance on mergers and acquisitions compared to the current administration’s more aggressive approach to blocking large-scale deals.
With input from the Financial Times, Axios, and the New York Times.
