Maurice Levy (L) , French advertising group Publicis chief executive, and John Wren, head of Omnicom Group, have announced merger plans to create the world's biggest advertising group.
Maurice Levy (L) , French advertising group Publicis chief executive, and John Wren, head of Omnicom Group, have announced merger plans to create the world\'s biggest advertising group.

Publicis Groupe and US company Omnicom Group have agreed to merge in an all-stock transaction to create the world's largest advertising company with $23 billion (£14.9bn) in revenue, toppling market leader WPP off the number one spot. The talks were first reported on Saturday on IBTimes UK.

Shareholders of Paris-based Publicis Groupe and New York-based Omnicom will each hold about 50% of the new company, Publicis Omnicom Group. Publicis Chief Executive Officer Maurice Levy and John Wren, his opposite number at Omnicom, will be co-CEOs.

Subject to regulatory and stockholder approvals, the creation of a new industry leader with a market value of $35 billion (£22.7bn), is expected to be completed by the first quarter of 2014, the companies said at a joint press conference in Paris.

The alliance brings together agencies including Omnicom's BBDO Worldwide and Publicis' Leo Burnett and Saatchi & Saatchi. The merger also brings the owners more clout to negotiate better ad rates for their clients for media placement on TV, online and in print.

"Our ambition together is to create a new standoff for our industry," said Levy, 71, at the conference in Paris. Wren, his Omnicom opposite number, said: "This is done with the clear intention that we will create value."

The new holding company will be based in the Netherlands, according to Bloomberg, while the operating offices will remain in Paris and New York. Publicis and Omnicom project efficiencies of about $500 million (£32.5m) from the merger.

The transaction is the biggest in the ad world so far. Publicis, Omnicom and London-based WPP, led by Martin Sorrell, have grown through consolidation over the years.

Global ad spending will rise by about 5.1% in 2014 next year, up from 3.5% in 2013, according to ZenithOptimedia, a researcher that is part of Publicis. Further growth is predicted to reach 5.8% in 2015.

Publicis, the third-largest advertising firm, brings a large portfolio of digital assets including Digitas, LBi International and Razorfish, a client roster including Bank of America Corp., Coca-Cola Co. and BMW AG, as well as agencies in emerging markets.

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Publicis Groupe 'in Merger Talks' with Omnicom