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Shares of advertising behemoths Omnicom Group Inc. (OMC - Analyst Report) and PublicisGroupe SA (PUBGY) are riding high post news of their proposed merger. Share prices of both stocks are up 1.3%, following the approval of their impending merger from U.S. antitrust authorities. However, the merger still needs to be sanctioned by shareholders of both companies.

The merger has already been approved by regulatory authorities of Canada, India, Turkey, South Africa and South Korea.

In July, the world’s no. 2 and no. 3 advertising agencies, Omnicom and Publicis, respectively, had signed a definitive agreement to create Publicis Omnicom Group. Arguably, the combined company is the world’s biggest communications, advertising, marketing and digital services company. Having 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 current quarter or the first quarter of 2014.

Each shareholder of both companies will hold about 50% of Publicis Omnicom Group’s equity. PublicisGroupe’s 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 share with a special dividend of $2 per share.

This merger is anticipated to reopen avenues for growth and success for the individual companies. The 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. Maurice Lévy and John Wren, the CEOs of PublicisGroupe and Omnicom, respectively, will be co-CEOs of 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.

Analysts believe that the deal and eventual formation of Publicis Omnicom Group will topple WPP Plc. (WPPGY - Analyst Report) as the #1 advertising company. WPP has been a leader in the advertising world since 2008.

Another company in the advertising sector worth considering is Clear Channel Outdoor Holdings Inc. (CCO - Snapshot Report)  with a Zacks Rank #2 (Buy).

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