This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

The Deal: Omnicom Fusion Creates New Advertising Leader

NEW YORK (The Deal) -- Marketing heavyweights Publicis SA and Omnicom Group (OMC) on Sunday, July 28, signed off on an all-share merger that will reshape the advertising landscape, creating a Franco-American industry colossus with a market capitalization of about $35.1 billion and revenue of about $22.7 billion.

The resulting Publicis Omnicom Group will be the world's largest advertising agency by both equity value and revenue. It will be 50/50 owned by the shareholders of the merger partners, with the balance achieved by special dividends of as much as $724 million for Omnicom shareholders and just under 200 million Euros ($266 million) for Publicis' owners.

The combination will bring together some of the biggest names in advertising, public relations and media buying including Omnicom's agencies DDB, BBDO, TBWA and OMG as well as Publicis' Saatchi & Saatchi, Publicis Worldwide, BBH and Leo Burnett. The combination is expected to deliver "efficiencies" of about $500 million a year, split equally between improved sales opportunities and cost savings.

"This is a merger that will set our new company on a path to accelerated growth, with long-term benefits for clients, employees and shareholders," Omnicom CEO John Wren said in a statement.

Wren and Publicis CEO Maurice Levy will share control of the company as co-CEOs for 30 months before Levy, who is 71, becomes chairman, leaving Wren, 61, as sole CEO.

Shareholders of each company will receive 50% of the combined group following distributions of special dividends to balance their contributions. Shareholders in Paris-based Publicis will receive one share in the new company for each existing share and a special dividend of 1 Euro per share. Shareholders in Omnicom, of New York, will receive 0.813 of a new share for each existing share and a payment of $2 per share. In addition, Omnicom shareholders will receive as many as two quarterly dividends of 40 cents per share ahead of the closing date.

Omnicom had a market capitalization of $16.84 billion, while Publicis was worth 11.82 billion Euros ($15.69 billion) at Friday's close. The combination will see the new group leapfrog Britain's WPP to become the No.1 advertising group. WPP has a market capitalization of 15.7 billion U.K. pounds ($24 billion).

Stock quotes in this article: OMC, PEP, MSFT, KO, GOOG 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,417.44 -7.41 -0.05%
S&P 500 1,864.52 +2.21 0.12%
NASDAQ 4,099.1560 +12.9310 0.32%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs