Investors have given a lukewarm reaction to the proposed $35bn merger of Publicis and Omnicom, as the creation of a new Franco-US leader in global advertising and marketing faced scrutiny from clients, regulators, rivals and analysts.
The unexpected combination of the industry’s second and third largest companies by revenue, with a promised $500m of annual synergy benefits but no premium for either company’s shareholders, left shares in Publicis up only 0.25 per cent at €59.50 as trading closed in Paris. Omnicom shares were up by the same percentage at $65.27 by lunchtime in New York.
Rivals seized on the reaction as evidence of investor fears about a deal that could reshape competition in an industry already grappling with new entrants from Google to Accenture. “The market is saying they’re not convinced of the strategy,” said Sir Martin Sorrell, chief executive of WPP, the market leader by revenues.