Back to top

Analyst Blog

Omnicom Group Inc. (OMC - Analyst Report)) and Publicis Groupe SA (PUBGY) have signed a definitive agreement to merge together to create Publicis Omnicom Group – arguably the world’s biggest communications, advertising, marketing and digital services company. With combined 2012 revenues of $22.7 billion and an equity market capitalization of approximately $35.1 billion, the transaction is a merger of equals and is expected to close in the fourth quarter of 2013 or the first quarter of 2014.

Every shareholder of both the companies will hold about 50% of Publicis Omnicom Group’s equity. Publicis Groupe shareholders will receive one newly-issued share of the agency for each Pubicis share they own with a special dividend of €1.00 per share. Omnicom shareholders will get 0.813 newly-issued shares with a special dividend of $2 per share.

This merger brings together iconic agency brands that will offer clients the industry’s leading talent across geographies. With over 130,000 employees, the new group will be well positioned to serve clients and help them better to build their brands and grow their businesses.

The communication and marketing landscape has been through a roller-coaster ride in the past and this merger is likely to reopen new avenues for growth and success for the individual companies. This merger will enable the agencies to make best use of their skilled workforce, diverse product offerings, and enhanced global footprint to leverage a list of global and local clients and reap synergistic benefits. The combined agency is expected to generate efficiencies of $500 million in future. Maurice Lévy and John Wren, the CEOs of Publicis Groupe and Omnicom, respectively, will be the co-CEOs for the new entity for an initial period of 30 months, following which Lévy will become non-executive Chairman and Wren will continue as the CEO.

Omnicom is one of the largest advertising, marketing and corporate communications companies in the world. Omnicom has a strong track record of winning new clients and receiving additional deals from the existing ones. The company’s business mix is well-diversified geographically and benefits largely from the growing markets. In addition, the company’s efforts in maintaining controlled expenses and strong global reputation are commendable.

Omnicom currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look are Clear Channel Outdoor Holdings Inc (CCO - Snapshot Report) and Harte-Hanks Inc.  (HHS - Snapshot Report), both carrying a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.73 +5.07%
GREEN PLAIN… GPRE 45.39 +3.61%
BANCO DO BR… BDORY 14.39 +3.15%
WEATHERFORD… WFT 23.45 +2.27%
SUPER MICRO… SMCI 25.21 +2.06%