The much touted ‘merger of equals’ between Publicis Groupe and Omnicom Group has collapsed. WPP CEO Sir Martin Sorrell speaks exclusively to exchange4media on this failed mega merger.
It may be recalled that Sir Martin had predicted the collapse at the exchange4media Conclave last year, where he was keynote speaker. The merger, which he termed as ‘POG’, was a merger of ‘unequals’, according to him. He further said, “Such mergers don’t work in the long-term. An organisational structure, where there is a co-chairman or rotating chairman, won’t last.”
Sir Martin speaks exclusively to exchange4media on the breakdown of the Publicis-Omnicom merger deal. Excerpts.
The merger did not last as per your prediction. Did you expect it to be called off so soon?
We thought that it would at least last till July, but the pressures were so intense. They were losing clients and people, the strategy was not thought through well, as predicted, there were people and client issues. Both companies have been saying they are both independently strong, which brings us to the question of ‘why bother to come together at all?’ The way things have panned out must have cost them over a 100 million dollars, it reflects on the quality of decision making.
What are some of the learnings that come out of the collapse of this much touted ‘merger of equals’ in your opinion?
• A merger cannot take place for emotional or egotistical reasons
• Strategic rationale, good planning and execution are must
• Your eyes are not bigger than your tummy
How does this impact WPP?
We have accelerated our targets in fast growth markets from 40 per cent to 45 per cent, and the announcement only spurs us to greater heights. We have kept up our momentum with our small- and medium-sized deals, which we are happy with.