Shares of advertising behemoths
Omnicom Group Inc
) are riding high post news of their proposed merger. Share
prices of both stocks are up 1.3%, following the approval of
their impending merger from U.S. antitrust authorities. However,
the merger still needs to be sanctioned by shareholders of both
The merger has already been approved by regulatory authorities
of Canada, India, Turkey, South Africa and South Korea.
In July, the world's no. 2 and no. 3 advertising agencies,
Omnicom and Publicis, respectively, had signed a definitive
agreement to create Publicis Omnicom Group. Arguably, the
combined company is the world's biggest communications,
advertising, marketing and digital services company. Having
combined 2012 revenues of $22.7 billion and an equity market
capitalization of approximately $35.1 billion, the transaction is
a merger of equals and is expected to close in the current
quarter or the first quarter of 2014.
Each shareholder of both companies will hold about 50% of
Publicis Omnicom Group's equity. PublicisGroupe's shareholders
will receive one newly issued share of the agency for each
Pubicis share they own, with a special dividend of €1.00 per
share. Omnicom shareholders will get 0.813 newly issued share
with a special dividend of $2 per share.
This merger is anticipated to reopen avenues for growth and
success for the individual companies. The merger will enable the
agencies to make best use of their skilled workforce, diverse
product offerings, and enhanced global footprint to leverage a
list of global and local clients and reap synergistic benefits.
Maurice Lévy and John Wren, the CEOs of PublicisGroupe and
Omnicom, respectively, will be co-CEOs of the new entity for an
initial period of 30 months, following which Lévy will become
non-executive Chairman and Wren will continue as the CEO.
Analysts believe that the deal and eventual formation of
Publicis Omnicom Group will topple
) as the #1 advertising company. WPP has been a leader in the
advertising world since 2008.
Another company in the advertising sector worth considering is
Clear Channel Outdoor Holdings Inc.
) with a Zacks Rank #2 (Buy).
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WPP PLC (WPPGY): Free Stock Analysis Report
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