Two massive holding companies are becoming one massive holding company.
Omnicom’s proposed acquisition of IPG for $13.25 billion in stock will make it the largest holding company – and create massive change for its thousands of employees. For example, many have already taken note of the projected $750 million in annual cost savings.
To unpack the acquisition, Madison and Wall founder Brian Wieser came on as a guest to the podcast this week. The former equity analyst and IPG and GroupM employee operates a firm offering consultancy and data services for ad-related businesses.
“There’s no question that there will be a lot of redundancies,” especially in back-office and mid-office functions, Wieser says (think HR, accounting).
But the acquisition will also increase the gravitational pull of the massive agency. “There’s a circular benefit in that the more scale you have, the more scale you get,” Wieser says.
For example, agencies have struggled to attract expert talent in retail media (one reason Omnicom spent a massive sum on Flywheel last year). AI, too, is an area where creating a center of excellence will pull in even better talent.
Post-acquisition, Omnicom (whose shareholders will own the majority of the new company) will likely see its leaders making the majority of the decisions as the acquiring company. Its rival hold co, Publicis, has benefited from more centralized leadership, Wieser notes, and the combined Omnicom-IPG may need to become more centralized as well in order to give all of its agencies – and there are many, many of them – a common vision and minimize any political clashes between groups.
The acquisition won’t close until next year – so stay tuned as this massive deal shakes up the ad industry in the months to come.
