Egos partly responsible for collapse of Omnicom-Publicis merger deal
Advertising firms Omnicom Group Inc and Publicis Groupe SA recently called off their planned merger, prompting many market watchers to say that it was a merger egos and not a merger of equals, as the two firms had claimed at time of announcement of the deal in July last year.
It unsuccessful deal was called a merger of egos because Publicis chief executive officer (CEO) Maurice Levy as well as Omnicom CEO John Wren wanted to use the merger to leapfrog Sir Martin Sorrell's WPP Group PLC to become the world's largest advertizing agency. Thus, those egos are now seeing partly responsible for the merger deal falling apart.
The two firms had agreed to merger even as there were disagreements over control of the new company. While Mr. Wren and Mr. Levy had agreed to share the role of CEO for a thirty-month transition period; there was no clarity over who would own other top roles, which eventually led to clashes.
Reports also suggest that there were disagreements over which of the two firms would technically acquire the other under the $35 billion (_25.4 billion) deal.
During a conference call to discuss the decision last Friday, Mr. Levy said, "I have not been able to convince John that balance means balance." On another conference call, Mr. Wren said, "I think it'll be a very long time before I try to do a merger of equals again."
Announcing the decision to scrap the deal, Mr. Wren openly admitted that there were a lot of complex issues that they failed to resolve and they didn't want to go ahead with uncertainty.
Apart from disagreements, the two companies were also concerned over potential regulatory hurdles and tax approvals in countries like China and Britain.