Credit: Eran Menashri via Unsplash
Omnicom, expecting more than $US750 million in savings from integrating competitor IPG, hasn’t factored in revenue opportunities into the deal.
Omnicom absorbing IPG will create the world's biggest advertising player with 100,000 people and revenue of $25.6 billion (net revenue of $20 billion).
The deal has been progressing through shareholder approval and regulatory review. A shareholder vote to approve the transaction is due March 18.
Omnicom CFO Philip J. Angelastro told an investor conference organised by investment bank Morgan Stanley that revenue synergies haven’t been included in the deal.
“But we certainly expect them, and they'll be a big part of the planning process that we go through over the next few months here,” Angelastro said.
“There'll certainly be some low hanging fruit as it relates to media and data opportunities, no question.”
However, the two companies can’t plan or talk about pursuing client opportunities jointly until the deal closes.
“But we can certainly plan for the integration, and we'll be doing that in earnest over the next few months here prior to close."
From a client perspective, the feedback is good, Angelastro said.
“Clients are excited about what the new company can do for them,” he said. “We certainly haven't gotten negative feedback.
“We're also excited about the synergy opportunities. We've announced $US750 million of expected synergies and the goal internally is going to be to achieve more than the $750 million.
“We're excited about about the combination with IPG, especially as it relates to our media business, our data business, precision marketing business, as well as the rest of our disciplines, in particular health, health care and PR, where we both have a big and strong presence,
“We think it's going to be a powerful, powerful business combined, and certainly a lot of opportunities to grow revenues. And that's primarily why we're excited. We expect a lot of revenue growth opportunities over time.”
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