EU greenlights Omnicom-IPG US$13.5bn merger

The European Commission has given the green light for Omnicom’s proposed acquisition of Interpublic Group (IPG), ruling that the deal raises no competition concerns across the European Economic Area (EEA).

Both Omnicom and IPG operate across advertising, marketing and communications globally, offering marketing communication services (MCS) and media buying services (MBS). MCS cover the creative work behind advertising campaigns, while MBS involve the purchasing of media space on behalf of clients.

Following a Phase I investigation, the Commission found that the merged entity would hold moderate market positions across national MCS and MBS markets in the EEA. It added that Omnicom and IPG would continue to face strong competitive pressure from global agency groups including WPP, Dentsu, Publicis and Havas.

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According to the Commission, customers would be able to switch agencies easily should prices rise or quality drop, supported by competitive pitching, short contract durations and relatively low switching costs.

It also noted that even if the combined group attempted to use its media buying scale to gain additional leverage with media owners, publishers and broadcasters would retain “sufficient countervailing power” due to high market concentration in several European countries.

The Commission concluded that the transaction is unlikely to impede effective competition in any examined market and cleared the deal unconditionally.

Omnicom, headquartered in the US, offers brand advertising, CRM, media planning and buying, PR and specialty communications services. IPG, also US-based, provides media planning and buying, data and engagement solutions, integrated advertising and creativity, PR and experiential services.

The deal, valued at around US$13.3 billion, will form the world’s largest advertising holding company, overtaking Publicis Groupe and WPP. It is projected to generate more than US$20 billion in revenue for Omnicom.

In a previous report by MARKETING-INTERACTIVE, John Wren, chairman and chief executive officer of Omnicom, had said that the deal was expected to close by late November, pending EU regulatory approval. He also described the merger as a move that will create “the world’s leading marketing and sales company.”

“Together, we will emerge with the industry’s most talented team and a powerful platform designed to accelerate growth through strategic advantages in data, media, creativity, production, and technology,” Wren added.

In July, the Australian Competition and Consumer Commission (ACCC) approved the deal, saying it was unlikely to substantially lessen competition in Australia’s media and marketing services market. 

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