Omnicom acquires Interpublic in a stock deal, creating a marketing powerhouse. The combined company boasts 100,000+ experts and $25.6B in revenue. It is expected to close in 2H 2025.
Today, Omnicom and The Interpublic Group of Companies, Inc. announced that their Boards of Directors have unanimously approved a definitive agreement under which Omnicom will acquire Interpublic in a stock-for-stock transaction. The combined company will bring together the industry’s deepest bench of marketing talent and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform. The companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients.
Under the terms of the agreement, Interpublic shareholders will receive 0.344 Omnicom shares for each share of Interpublic common stock they own. Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis. The transaction is expected to generate annual cost synergies of $750 million.
The new Omnicom will have over 100,000 expert practitioners. The company will deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.
“This strategic acquisition creates significant value for both shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth,” said John Wren, Chairman & CEO of Omnicom. “Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to combine our technologies, capabilities, talent, and geographic footprints to bring clients superior, data-driven outcomes. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.”
Also Read: Lyft, Uber, and the Tech Industry’s Growing Ad-Creep Trend
“This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network,” said Philippe Krakowsky, Interpublic’s CEO. “Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas enabled by technology and data. By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a rapidly changing world. We look forward to working with John and the entire Omnicom team.”
Transaction Highlights
- Highly complementary assets create an unmatched portfolio of services
and products that expand client opportunities for each company on day one - Omnicom and Interpublic share highly complementary cultures and core values ,including a foundational belief in the power of ideas enabled by technology and data
- Creates an industry-leading identity solution with the most comprehensive understanding of consumer behaviors and transactions, enabling us to deliver superior outcomes for our clients at scale and speed
- Advances our ability to continually innovate and develop new products and services, providing higher ROI on marketing spend
- Significant free cash flow provides greater capacity for internal investments and acquisitions
Leadership and Governance
John Wren will remain Chairman and CEO of Omnicom. Phil Angelastro will remain EVP and CFO of Omnicom. Philippe Krakowsky and Daryl Simm will serve as Co-Presidents and COOs of Omnicom. Krakowsky will also be Co-Chair of the Integration Committee post-merger. Three current Interpublic Board of Directors members, including Philippe Krakowsky, will be welcomed to the Omnicom Board of Directors.
Transaction Details and Financial Profile
The transaction is expected to generate $750 million in annual cost synergies and be accretive to adjusted earnings per share for both Omnicom and Interpublic shareholders. Omnicom will have an attractive pro forma financial profile:
- Combined 2023 revenue of $25.6 billion, Adjusted EBITA of $3.9 billion and free cash flow of $3.3 billion
- Combined 2023 revenue of 57% U.S. and 43% International
- Strong balance sheet, commitment to investment grade rating with combined debt to EBITDA ratio of 2.1x before the benefit of synergies
- Omnicom will continue its practice for the use of free cash flow: dividends, acquisitions and share repurchases
- Both Omnicom and Interpublic will maintain their current quarterly dividend through the closing of the transaction
The stock-for-stock transaction is expected to be tax-free for both Omnicom and Interpublic shareholders and to close in the second half of 2025, subject to Omnicom and Interpublic shareholder approvals, required regulatory approvals, and other customary conditions.
The combined company will retain the Omnicom name and trade under the OMC ticker symbol on the New York Stock Exchange.
Also Read: How AI Augments, Not Replaces, Human Marketing Skills, Says Amanda Cole
Advisors
PJT Partners is Omnicom’s financial advisor, Latham & Watkins LLP is its legal advisor, Morgan Stanley is Interpublic’s financial advisor, and Willkie Farr & Gallagher LLP is its legal advisor.
Conference Call
The companies will hold a conference call to discuss the transaction on Monday, December 9, 2024 at 8:30 a.m. Eastern Time. Live and archived webcasts and an accompanying investor presentation will be available in the investor relations section of www.omnicomgroup.com and www.interpublic.com.
