Omnicom and Publicis have given up on their merger dream. <br /><br />Last July the bosses of the US and French companies unveiled a deal that would have created the world’s largest advertising agency.<br /><br />Now they have admitted that there are too many problems in bringing the rivals together. <br /><br />The collapse is because of issues ranging from its complex tax structure to the firms’ divergent cultures.<br /><br />Commentator John Foley with Reuter’s Breakingviews has been following the saga: “These two companies should, on paper, have made the perfect merger. They’re both roughly the same size, they’re both in the same business so there are cost savings of about $500 million a year. And the chief executives saw eye-to-eye, they drew this whole thing up, but what they didn’t do is think through the people issues – who’s going to take what job, what will the clients think, what will regulators think and what will the tax man think. And on those grounds the deal eventually fell apart.”<br /><br />It was supposed to be a merger of equals that would enable better competition in the digital age with the top dog – Britain’s WPP.<br /><br />News of the collapse caused WPP’s shares to rise as it keeps its crown as the world’s largest agency now that its rivals are staying independent. <br /><br />Publicis said one reason they had given up was Omnicom wanted to hold too many of the merged firm’s top jobs. <br /><br />The French agency’s CEO Maurice Levy did not feel that was balanced: “Omnicom wanted their people to fill the CEO, CFO and general counsel jobs. I thought that went too far. I thought Publicis needed to fill the CFO job to preserve the equilibrium and ensure that our business model continued.”<br /><br />Omnicom CEO John Wren said the two sides had failed to find a way past the strong corporate cultures that existed in each company.<br /><br />The delays and uncertainty meant both were losing major clients – over one billion euros worth in the past month alone.<br /><br />Neither company will pay a termination fee, and they will split the costs of the failed deal, such as legal fees.
