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Advertising giant Omnicom Group said Monday that it has agreed to acquire rival Interpublic Group in a merger that will create the biggest ad agency in the world.
The deal, which is comprised of an all-stock takeover, comes as the ad industry continues to experience massive distruption at the hands of tech giants like Facebook, Google that continue to dominate an industry that was once ruled by traditional ad agencies.
If the deal goes through, the combined Omnicom and Interpublic firms will employ over 100,000 workers and bring in some $25 billion in annual revenue, giving it more muscle to go up against tech and ad rivals amid the rise of digital advertising and artificial intelligence in the space.
That could help the company grow its share of the burgeoning ad market. According to a new study from media buying giant Group M, advertising has come roaring back this year, topping $1 trillion in revenue and marking 9.5% growth.
While the firm predicted ad revenue to continue to grow in 2025 to $1.1 trillion, it said just five companies — Google, Meta, TikTok owner ByteDance, Amazon and Alibaba — will account for more than half of all global ad revenue.
Shares of Omnicom fell nearly 7% in late morning trading, as Interpublic’s stock ticked up over 9% Monday.
Omnicom Chief Executive Officer John Wren said the acquisition of Interpublic would “harness the significant opportunities created by new technologies in this era of exponential change.”
Under the deal, which is expected to close in the second half of 2025, Omnicom shareholders would own roughly 60% of the combined company, with Interpublic shareholders holding the rest.
Omnicom execs said they had “clearly identified opportunities” for $750 million in annual cost savings. The combined company would keep the Omnicom name, they added.
In recent years, Interpublic has struggled and has lost a handful of critical clients including Verizon and BMW. The firm’s revenue was flat in 2023 compared with 2022, and it predicted growth of just 1% for 2024.
In order to generate cash, the company has moved to sell off its underperforming agencies, including Huge and R/GA. Last week, Interpublic sold Huge to a private equity firm AEA Investors for an undisclosed sum. It hasn’t provided a status update on the R/GA sale, however.
Critics speculate that the massive deal could raise regulatory scrutiny.
Although President-elect Donald Trump has indicated that he may be more accepting of big mergers and aquisitions, his choice of Gail Slater to lead the Justice Department’s antitrust division, signals to many that he plans to continue the Biden administration’s crackdown on tech industry dealmaking.
Omicom and Publicis tried to merge in 2013, citing the threat of disruption from tech, but the massive deal proved unmanageable due to all of the subsidiary companies that were involved, and it eventually fell apart.
The same thing could happen again, according to analysts at Bernstein.
“Common sense suggests a merger that large would raise significant execution challenges from a client and talent retention standpoints,” the analysts said in a note.
Interpublic was founded in 1930 with the merger of ad agencies McCann and Erickson. It owns well-known ad firms including McCann Worldwide and the ad-buying giant IPG Mediabrands.
Omnicom was created in 1986 as part of a larger merger of ad agencies including BBDO Worldwide.
It currently owns the agencies TBWA, OMD and the digital commerce company Flywheel.
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