Don't miss

Replay


LATEST SHOWS

THE DEBATE

Ten days to save Merkel? German leader under pressure over border policy

Read more

FOCUS

Alarmingly high rates of HIV among China's youth

Read more

ENCORE!

Samira Wiley, Darren Criss & Neal McDonough at Monte-Carlo Television Festival

Read more

THE OBSERVERS

Violence against trangender women in Indonesia, and more

Read more

IN THE PRESS

'The frozen heart of America': Condemnation as migrant families torn apart in US

Read more

THE INTERVIEW

'There are two policies towards Russia in the Trump administration'

Read more

PERSPECTIVE

Grandmas Project: 'Their history was passed down through food'

Read more

ACROSS AFRICA

Mali's basketball star: NBA top player Cheick Diallo makes hometown proud

Read more

BUSINESS DAILY

Trump threatens huge new tariffs on China

Read more

Business

Ad giants Omnicom and Publicis call off $35bn merger

Video by Delano D’SOUZA

Text by FRANCE 24

Latest update : 2014-05-09

A proposed $35 billion merger between US-based Omnicom Group and French rival Publicis Groupe has been called off as the challenges in forming the world's largest advertising agency proved too immense for the partners, it was announced on Thursday.

Presented in July as a merger of equals, the deal began to seriously unwind in late April when Omnicom Chief Executive John Wren expressed doubts about the deal, citing tax complications.

"The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders," Wren and Publicis CEO Maurice Levy said in a joint statement released on Thursday. "We have thus jointly decided to proceed along our independent paths. We, of course, remain competitors, but maintain a great respect for one another."

The deal was called off over a number of sticking points including the companies' failure to agree on a chief financial officer who would have taken charge of implementing the deal, a source close to Publicis told Reuters.

Neither company will pay a termination fee.

‘Cultural differences’

Another source familiar with the matter told Reuters that broader cultural differences between the two companies proved troublesome as tension over leadership and strategy came to a head. The boards of the two companies met on Thursday to unwind the deal, a third source said.

All three sources requested anonymity because they are not authorised to discuss the matter publicly.

The merger called for a 50-50 ownership split of the equity in the proposed new company, Publicis Omnicom Group, with Wren and Levy serving as co-CEOs for 30 months from the closing.

One of the sources said that "big egos" were involved.

The crucial choice of CFO, a key position that would determine how the company would operate, hewing either to Publicis's centralised structure or Omnicom's less controlling approach to subsidiaries, had been a particular sticking point as the months dragged on.

As the companies struggled to keep the merger on track they had faced a fight to retain clients and talent.

Wren and Levy, celebrating the deal with champagne toasts in Paris last summer, said it would enable them to better compete with the likes of Google and Facebook in the realm of digital advertising, which accounts for nearly a quarter of global marketing spending.

(FRANCE 24 with REUTERS)

Date created : 2014-05-09

COMMENT(S)