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Two giant ad agencies are to merge. Omnicom of the U.S. and the French firm Publicis are tying the knot in a $35 billion deal.
Even the superlatives favored by the ad industry hardly do justice to the deal. It is a monster, a mammoth. The new group will be the world’s biggest, employing more than 130,000 people and with annual sales approaching $23 billion. But analysts say other ad agencies will be salivating over the merger because the two firms are so big they will bring rival accounts under the same roof — like Coke and Pepsi. And that could lead to a shake up in global advertising business.
“It may be that clients — because of conflicts of interest within a particular industry — decide to look for another supplier of advertising services . And I would expect most of the industry participants to watch for that,” says Euan Stirling of Standard Life Investments.
A Franco-American deal like this is unusual and might be expected to step on French national sensitivities. But because it is not a takeover — because it’s described as merger of equals, with two CEO’s acting in tandem — the French government has, reportedly, given its blessing.
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