Omnicom to acquire Interpublic Group in $25.6 billion deal

Omnicom Group Inc. has announced plans to acquire The Interpublic Group of Companies, Inc. in a significant stock-for-stock transaction that is set to create a leading global marketing and advertising entity. The deal, approved unanimously by both companies' boards of directors, is expected to close in the second half of 2025, subject to shareholder approvals, regulatory clearances, and customary conditions.

Transaction details and financial Impact

Under the agreement, Interpublic shareholders will receive 0.344 shares of Omnicom for each share of Interpublic common stock. Upon completion of the deal, Omnicom shareholders will own 60.6% of the combined company, while Interpublic shareholders will hold 39.4%, on a fully diluted basis. The transaction is projected to generate $750 million in annual cost synergies and is expected to be accretive to adjusted earnings per share for both companies' shareholders.

The merger will create a company with a combined revenue of $25.6 billion for 2023, adjusted EBITA of $3.9 billion, and free cash flow of $3.3 billion. The combined entity will maintain a balanced geographic presence, with 57% of revenue derived from the U.S. and 43% from international markets. Omnicom's debt-to-EBITDA ratio, before the synergies, is expected to be 2.1x, ensuring a strong financial foundation.

Strategic significance

The newly formed Omnicom will have over 100,000 marketing and advertising proffesionals, positioning it to provide end-to-end solutions across a range of disciplines, including media, precision marketing, CRM, data analytics, digital commerce, advertising, healthcare, public relations, and branding. This strategic merger aims to enhance the company's capacity to create comprehensive full-funnel marketing solutions that deliver superior results for clients worldwide.

John Wren, Omnicom's Chairman and CEO, said, “This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms, enabling new offerings to better serve our clients and drive growth. We are poised to accelerate innovation and harness the opportunities presented by new technologies in this era of exponential change.”

Philippe Krakowsky, CEO of Interpublic, added, “Our two companies have highly complementary offerings, geographic presence, and cultures. We share a belief in the power of ideas, enabled by technology and data. By joining forces, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a rapidly changing world.”

Leadership and governance

Wren will continue as Chairman and CEO of the combined entity, while Phil Angelastro will remain as Executive Vice President and CFO. Krakowsky and Daryl Simm will serve as Co-Presidents and COOs of Omnicom, with Krakowsky also serving as Co-Chair of the Integration Committee post-merger. Three members of Interpublic’s Board of Directors, including Krakowsky, will join Omnicom's board.

Future outlook

The merger is expected to leverage Omnicom’s free cash flow for strategic investments, acquisitions, and shareholder returns. The company intends to maintain its practice of using free cash flow for dividends, share repurchases, and internal growth initiatives. Both companies will uphold their current quarterly dividend payments until the transaction closes.

The combined company will operate under the Omnicom name and continue to trade under the OMC ticker symbol on the New York Stock Exchange. The transaction is structured as a tax-free stock-for-stock exchange for both Omnicom and Interpublic shareholders.

Advisors

PJT Partners and Morgan Stanley are acting as financial advisors for Omnicom and Interpublic, respectively. Latham & Watkins LLP and Willkie Farr & Gallagher LLP are serving as legal advisors for Omnicom and Interpublic.