So these two advertising giants just announced the merger this past weekend to create a $35+bn company, making it the largest in the industry.
Moelis advised for Omnicom and Rothschild advised for Publicis. Anyone have any idea what those fee structures would be like? I'm not in IB, but I understand it's usually a percentage of the deal taken for the fees. It's a pretty huge deal, so I was just curious how well the two boutiques made out.
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More interested in long-term prospects and effect on Facebook and Google.
I've seen bigger deals...
don't know about fee structure. learned everything i needed to know about advertising m&a / restructuring from watching mad men.
I come from an advertising background, and I think the conflict of interest stuff is overblown.
A holding company simply consists of an entity that owns a bunch of independent agencies. Those individual agencies still compete with each other for revenue, as any shift in client accounts means all the people in that agency on that account get fired when the client leaves.
Inter-agency relationships aren't that integral except for media buying negotiations. It doesn't really affect creative or research sides.
My question is - what is the rationale for merging? I fail to see any type of "synergies" but can imagine there being some pissed off clients.
1) On a larger level, clients only have a choice between two major ad holding companies (WPP and Publicis-OMC).
2) For special initiatives, they can bring together top talent from different agencies for special and unique market shifts (see the creation of Vivaki think tank).
3) On an aggregate level, it makes the financials of the holding companies look better for stock purposes.
4) On the POLITICAL level, this is about the OMC CEO eventually succeeding the Publicis CEO who's old and needed a successor anyways. Also, Publicis is strong in digital measurement and media buying. OMC has the stronger overall company. That's the leverage point with this merger, which is a mutually beneficial acquisition on OMC's part.
Finally, I wouldn't be surprised if WPP makes a bid at Interpublic or Havas within the next year.
This is a very "financey" way of looking at the transaction, but I think from an operational standpoint it will be a bit of a disaster (if it ever gets through regulatory, which will be interesting to see).
My gf is in marketing with a well known F100 company. When I sent her the transaction announcement, this was her immediate response: "Wow that's pretty insane!!! They need smaller agencies not bigger ones!!!"
I'm also a big fan of this take, which again comes from a non-finance perspective:
http://www.forbes.com/sites/willburns/2013/07/30/the-unintended-consequ…
Someday you too will evolve.
He got banned :/
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