Omnicom Group Inc. (NYSE:OMC) and Publicis Groupe SA (EPA:PUB) were close to a $35 billion deal to merge both companies. However, Publicis CEO Maurice Levy said that the deal fell apart due to fundamental differences over how the leadership would be balanced. Levy denied that it was due to a personality clash between Levy and his counterpart at Omnicom John Wren.
“We saw it as an opportunity, not a necessity…In the end with respect to how the combined company would run, we were unable to reach decisions on management and other key issues, despite out best efforts,” said Wren during a conference call to investors and the media.
Wren also emphasized that the circumstances around taxes in the European Union changed in the 9 months since the deal was announced. The merger was expected to help the companies compete against Internet advertising giants like Facebook and Google and strengthen growth in Asia and Latin America. The two mutually decided to end the deal because they were not able to complete the merger in a reasonable time frame.
“We knew there would be differences in the corporate cultures of Omnicom and Publicis,” added Wren. “That is to be expected any time strong management teams are coming together. But I know now that we had underestimated the depth of these differences,” making it difficult to make “major operating decisions.”
New York based Omnicom Group owns BBDO Worldwide, DDB Worldwide Communications Group, and TBWA Worldwide among other agencies. Publicis Groupe runs brands like Publicis, Leo Burnett Worldwide, Saatchi & Saatchi, and DigitasLBi.
There would not be any termination fees and both companies did not share any competitive information during the negotiations. Omnicom did not lose any clients during the period of the deal.