EU clears giant Publicis, Omnicom advertising merger

Thursday 09 January 2014 15.38
European Commission clears merger between France's Publicis and US peer Omnicom
European Commission clears merger between France's Publicis and US peer Omnicom

The European Commission has today cleared a €26.5 billion merger between France's Publicis and US peer Omnicom which will create the world's biggest advertising company.

The decision follows a greenlight by US authorities in November, and means the companies have passed a key hurdle to become an advertising giant with a combined workforce of over 130,000.

The nature of the market, "the presence of other large competitors, the relatively low barriers to entry, and the significant countervailing power of media vendors will ensure a level playing field after the merger," the Commission said.

Omnicom is currently the world number two advertising company and Publicis third, and their merger will put them far in front of the current leader WPP.

The merged company, the Publicis Omnicom Group will focus on digital platforms which are increasingly replacing traditional formats such as print.

The Commission, which polices the EU's competition regulations, said it had looked at the possible market impact in some 20 countries and found no reason to block the deal.

The new company will "be sufficiently constrained by several competitors, including large international advertising groups - such as WPP, Dentsu-Aegis, IPG and Havas - capable of meeting the more complex requirements of large advertisers with global reach," it said in a statement. 

"The Commission therefore concluded that the transaction would not raise any competition concerns," it added.

The merged group will bring under one roof top advertising agencies such as Saatchi & Saatchi, Leo Burnett, Razorfish, BBDO and Ketchum representing clients like Nike, LVMH, Nestle, Volkswagen, Unilever and ExxonMobile.

The digital revolution has radically shaken up the advertising industry, with online and mobile systems, including social networks, the dominant formats of the future.