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Merger Will Create World’s Largest Advertising Firm

American and European regulators are likely to object


mergers and acquisitionShares of U.S. advertising giant Omnicom Group (OMC) surged more than 7% in Monday morning trading after it announced that it would merge with France’s Publicis Groupe (PUBGY), creating the biggest advertising company in the world. Shares of Publicis climbed more than 5% in over-the-counter trading on the news.

The “merger of equals” would create an entity valued at more than $35 billion and employing 130,000. However, industry experts say the deal is almost certain to face resistance from European and American regulators due to its sheer size, the Associated Press notes.

The 5 Biggest Advertisers in America
The 5 Biggest Advertisers in America

The two companies say the deal will allow them to realize as much as $500 million in reduced costs and boost their expansion into Asian and Latin American markets. Under the deal, the current CEOs of both companies would co-head the combined company, which will be called Publicis Omnicom Group.

Last year, Omnicom reported revenue of $14.22 billion and earnings of almost $1 billion. It owns a number of prominent advertising agencies, including DDB Worldwide, BBDO Worldwide and TBWA Worldwide.

The combined company would control almost 40% of U.S. ad sales, a fact which is unlikely to please U.S. regulators.

Article printed from InvestorPlace Media,

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