In what is believed to be a new dawn for advertising, globally, two of New York’s listed ad holding companies- Omnicom Group has now entered into a definitive agreement with Interpublic Group to acquire the latter in a stock-for-stock transaction which is expected to generate annual cost synergies of $750 million.
With this development in place, the combined entity will retain the Omnicom name and trade under the OMC ticker symbol on the New York Stock Exchange, and is expected to close in the second half of 2025, subject to Omnicom and Interpublic shareholder approvals, required regulatory approvals, and other customary conditions.
Under the terms of the stock-for-stock transaction agreement, Interpublic shareholders will receive 0.344 Omnicom shares for each share of Interpublic common stock they own. And following the transaction’s completion, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis.
That being said, the leadership of the unified entity will see John Wren continuing his role of Chairman and CEO at Omnicom; Phil Angelastro remaining EVP and CFO of Omnicom; Daryl Simm continuing and COO of Omnicom and IPG CEO Philippe Krakowsky joining him as COO to the both being Co-Presidents of proposed Omnicom entity. Additionally, three current members of the Interpublic Board of Directors, including Philippe Krakowsky, will also be welcomed to the Omnicom Board of Directors and Krakowsky being named Co-Chair of the Integration Committee of the proposed takeover deal.
Bringing together ‘unmatched’ capabilities- including the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, underpinned by the most advanced sales and marketing platform, Omnicom and Interpublic will be strongly positioned for continued growth in the new era of marketing with the two companies expanding their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients.
Poised to deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding, the new Omnicom will have over 100,000 expert practitioners.
Also Read: Ad Network Omnicom Group In Advanced Negotiation Talks To Takeover Interpublic Group
Below are the Transaction Highlights of the deal, as mentioned in the joint note shared by Omnicom:
- Highly complementary assets create an unmatched portfolio of services and products that expands client opportunities for each company on day one
- Omnicom and Interpublic share highly complementary cultures and core values including a foundational belief in the power of ideas enabled by technology and data
- Creates an industry leading identity solution with the most comprehensive understanding of consumer behaviors and transactions, enabling us to deliver superior outcomes for our clients at scale and speed
- Advances our ability to continually innovate and develop new products and services, providing higher ROI on marketing spend
- Significant free cash flow provides greater capacity for internal investments and acquisitions
Transaction Details and Financial Profile:
The transaction is expected to generate $750 million in annual cost synergies and be accretive to adjusted earnings per share for both Omnicom and Interpublic shareholders. Omnicom will have an attractive pro forma financial profile:
- Combined 2023 revenue of $25.6 billion, Adjusted EBITA of $3.9 billion and free cash flow of $3.3 billion
- Combined 2023 revenue of 57% U.S. and 43% International
- Strong balance sheet, commitment to investment grade rating with combined debt to EBITDA ratio of 2.1x before the benefit of synergies[2]
- Omnicom will continue its practice for use of free cash flow: dividends, acquisitions and share repurchases
- Both Omnicom and Interpublic will maintain their current quarterly dividend through the closing of the transaction
Sharing his viewpoint on the transaction deal resulting in a new Omnicom, John Wren, Chairman and CEO, 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,” he added.
Upon becoming a part of a new and unified Omnicom, Philippe Krakowsky, CEO, Interpublic Group, 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,” he added.
