Direct and digital agency bosses have heaved a collective sigh of relief following the collapse of the proposed $35.1bn (£22.8bn) merger between Omnicom and Publicis, easing fears of huge job cuts and agency closures.
The boards of the US and French companies met on Thursday evening to ditch the deal, which was originally hailed as a “merger of equals”. WPP boss Sir Martin Sorrell has already seized on the move, decrying it as a “sorry saga” driven by egos.
And one Omnicom DM agency boss told DecisionMarketing: “To be honest, I’m pretty relieved. It would have been a nightmare. Those $500m (£325m) of savings would’ve had to have come from somewhere. Many well-established DM agencies could have been under threat of merger and closure, not to mention the huge pressure on headcounts.”
UK direct and digital agencies which could have been affected by the deal included Rapp, TBCH, Agency Republic, Proximity London, Publicis Chemistry, Kitcatt Nohr, Arc, Razorfish and Saatchi X.
The break-up followed concerns of a cultural clash between the two groups, and worries that the deal was taking too long to complete – to the detriment of both businesses.
Since it was first announced in July last year, Omnicom and Publicis have lost billions of pounds worth of accounts, as they tried to seal the merger. In April, Vodafone moved its $1bn global ad and media account from Omnicom to WPP. Marks & Spencer, Danone, and GSK have also defected.
Maurice Lévy, chairman and chief executive of Publicis, and John Wren, president and chief executive of Omnicom, said in a joint statement: “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. We have thus jointly decided to proceed along our independent paths. We, of course, remain competitors, but maintain a great respect for one another.”
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