A proposed mega-merger between global ad agencies Publicis and Omnicom could bring rival accounts such as Coca-Cola and PepsiCo under one firm, underscoring the scale of the US$35.1 billion (HK$272.3 billion) deal and the potential conflicts it raises.
The companies said the deal - presented as a merger of equals - would give the combined firm the necessary scale and investment firepower to cope with rapid changes wrought by technology on the advertising business.
At a press conference in Paris, the chief executives of the two companies pledged they could handle concerns from major clients who may find the marriage too close for comfort, as well as address questions from regulators who are concerned about maintaining a competitive landscape.
“This is a new company for a new world,” Publicis Chief Executive Maurice Levy said. “It will be able to face the exponential development of new Internet giants like Facebook and Google, changing consumer behaviour, the explosion of big data, as well as handle the blurring of roles of all the players in the market.”
Levy said both companies had years of experience setting up “strict firewalls” to protect clients’ interests. Even so, the deal is likely to create some instability as rival ad agencies try to poach clients while Publicis and Omnicom are distracted by the merger.
“This is going to cause turmoil within the industry,” said a senior industry executive. “Everyone is going to reassess where they stand and every company outside of Omnicom and Publicis will be all over their clients during this period.”