Theories abound after Publicis/Omnicom merger breaks down

The proposed merger between Publicis Groupe and Omnicom fell through earlier this month, leading to speculation about reasons for the collapse and its resultant aftermath.

The firms had been in talks since last summer about a $35bn that would unite the companies under one banner as the world's biggest advertising agency.

However, on May 8, both Publicis and Omnicom released statements saying the proposed merger had been terminated.

"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,” said Maurice Lévy, CEO of Publicis and John Wren, CEO of Omnicom in the joint release.

The break-up of the deal has been put down to several reasons, including a clash of egos and management styles at the top, tax issues and concerns that Omnicom executives would hold the roles of CEO, CFO and general counsel at the merged company.

Rumours had also emerged that the slow progress of the deal and its related confusion meant that the groups' agencies were losing out on important client accounts.

As for what happens next, one theory, as reported by AdWeek, includes that of Paris-based financial firm Natixis, which suggests that a hostile takeover of Omnicom by Publicis was on the guards. However, there is speculation that the Natixis report is a 'trial balloon' – information released to the media to test the waters.

There was also similar speculation in a research note written by Pivotal Research Group senior analyst Brian Wieser, who made the claim that “a scenario which might be worth considering now is Publicis raising capital and bidding for Omnicom outright with a mix of shares and cash.”

Although acknowledging such talk as speculation, Wieser told AdWeek: “Always in the back of my mind, I thought the Omnicom merger was a Publicis acquisition by stealth.”

Elsewhere, Sharmin Kent, content marketing coordinator at DigitalRelevance, commented that both companies could pursue mergers or acquisitions with other firms.

For their part, Omnicom and Publicis said: “We, of course, remain competitors, but maintain a great respect for one another."