Publicis Omnicom merger puts healthcare clients under one roof

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John Wren (left), Maurice Lévy (right)
John Wren (left), Maurice Lévy (right)

The surprise merger between Omnicom Group and Publicis Groupe Sunday vaulted the new entity past WPP to become the number-one ad holding company by revenue.

The definitive agreement has been unanimously approved by the boards of both companies, creating an advertising behemoth with combined 2012 revenue of about $23 billion, a market cap of about $35.1 billion, and more than 130,000 employees, according to a statement. WPP reported $16.5 billion in worldwide revenue last year.

The new company, called Publicis Omnicom Group, will trade in New York and Paris, and will be led by Omnicom CEO John Wren and by Publicis Groupe CEO Maurice Lévy as co-CEOs.

The two cited the need for scale in keeping pace with dramatic changes in the communications and marketing landscape, including the development of new media giants like Facebook and Google, and the explosion of Big Data. The merger is also expected to generate about $500 million in savings.

But when you bring together such giants of consumer and professional advertising and promotion as Saatchi & Saatchi (Publicis) and CDM (Omnicom), there's bound to be some overlap.

Among the shared accounts is Pfizer, which in October consolidated its global creative to Omnicom, Publicis and WPP (the three companies had held the lion's share of the business already). For now, execs are reassuring healthcare clients that it's “business as usual.”

The task now falls on Levy and Wren to sort out any conflicts spawned by merging the huge number of pharma and device clients touched by the two holding companies and their agency networks. Such concerns have some execs and analysts predicting that the merger could prompt some big customers to defect.

“We're going to work extremely hard to resolve any client conflict issues with creative solutions," said Wren in a Monday morning press conference, as reported by Reuters.

The new holding company will be based in The Netherlands, and the Group's operational head offices will continue to be based in Paris and New York.

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