Omnicom, Publicis call off their proposed $35bn merger
U. S.-based advertising giant Omnicom Group Inc and its French competitor Publicis Groupe SA have scrapped their proposed merger.
The proposed $35 billion (£20.65 billion) merger would have created the world's largest advertising agency but the plan was scrapped after they estimated that potential challenges would prove too huge for them to handle.
Omnicom Chief Executive John Wren said there were a number of factors responsible for their decision to scrap the planned merger. Announcing the decision, Mr. Wren said, "There are a lot of complex issues we haven't resolved. There are strong corporate cultures in both companies that delayed us for reaching an agreement. There was no clear finish line in sight and uncertainty is never a good thing when you are in the personal service business."
Unclear tax issues were also proving a stumbling block in the merger process as Omnicom chief first publicly hinted in April this year during a conference call by stating that they had yet to receive consent for their plans to have tax residency in the UK, while being headquartered in the Netherlands.
Previously, the two companies had justified their merger, saying it would provide scale and capital to deal with technological forces dragging the advertising business.
Publicis Chief Executive Maurice Levy admitted that the decision to call off the process of merger was neither pleasant nor a painless one to make, but it was an essential one.
By scrapping the merger, the two companies have given in their potentially dominant position to existing advertising leader WPP Plc.