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We approach the merger with much optimism: Arvind Sharma on Omnicom - Publicis merger

29-July-2013
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We approach the merger with much optimism: Arvind Sharma on Omnicom - Publicis merger

The weekend was filled with news of the over $30 billion merger deal that took place between Omnicom and Publicis Groupe. In what is being positioned as a ‘merger of equals’, the new entity called ‘Publicis Omnicom Group’ includes brands BBDO, Saatchi & Saatchi, DDB, Leo Burnett, TBWA, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand, MSL GROUP, RAPP, Publicis Healthcare Communications Group (PHCG), Proximity, Rosetta, CDM, ZenithOptimedia, and Goodby and Silverstein & Partners, among others.

The entity is expected to be listed on NYSE and Euronext Paris, and included in S&P 500 and CAC 40.

‘Publicis Omnicom Group’ will be jointly led by Omnicom CEO John Wren and Publicis Groupe CEO Maurice Lévy. In a joint statement on the merger, the Co-CEOs said, “For many years we have had great respect for one another as well as for the companies we each lead. This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders.”

Wren and Lévy will lead the company as Co-CEOs through an initial integration and development period of 30 months, following which Lévy will become Non-Executive Chairman and Wren will continue as CEO.

The company will have a single-tier board with 16 members, consisting of the two Co-CEOs and seven Non-Executive Directors from each company. For the first year following the closing of the transaction, Bruce Crawford, currently Omnicom Chairman, will be the Non-Executive Chairman of Publicis Omnicom Group. He will be succeeded by the current Publicis Groupe Chairperson, Elisabeth Badinter, as Non-Executive Chairperson for the second year following the closing of the transaction.

Omnicom media business in India has seen a steady growth in the last five years with Omnicom Media Group’s growing accounts and business under the able leadership of Jasmin Sohrabji, who was elevated to CEO, SEA and India in May this year.

Coming to the advertising side of the business – which includes BBDO, DDB Group, and TBWA – DDB group has been consistent with new business wins, while BBDO has been a little quiet this year. TBWA has been in the news for a slew of new appointments (Parixit (Bhattacharya – Group CCO and Shirin Johari – CD) and its acquisition of Magnon to strengthen its digital offering.

Publicis Groupe has been in the news for hiring of Bobby Pawar as Chief Creative Officer – South Asia and Partha Sinha as Director, Chief Strategy Officer – South Asia.

The question that now comes to fore is whether the merger will involve an element of conflict when it comes to brands handled by the different agencies under the joint entity.

“Individual agencies need to focus on their clients. Leo Burnett and Publicis may have competitive brands, but as long as confidentiality is maintained, clients will enjoy greater speciality and expertise,” commented Arvind Sharma, Chairman of India Subcontinent at Leo Burnett.

The merger is undoubtedly huge with combined 2012 revenue of $22.7 billion / €17.7 billion and combined market capitalisation of $35.1 billion / €26.5 billion, based on closing prices on July 26, 2013. It is now a merged group of more than 130,000 employees.

We look forward to see how this merger will pan out in the long-term for all agencies involved, particularly from an Indian scenario.

“In the long run, being a part of a family and community, the implications are great; you have access to expertise and specialty. In the short run, agencies need to focus on their brands and clients, and give them the best product and support. Leo Burnett is one of the most awarded agencies locally and globally, we approach the merger with much optimism,” concluded Sharma.

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