Omnicom and Publicis merge to create world's biggest advertising firm

Omnicom Group and Publicis Groupe say they are combining in a "merger of equals" that will create the world's largest advertising firm, one worth more than US$30 billion.

The combined company will be called Publicis Omnicom Group and be jointly led by Omnicom chief executive John Wren and Publicis chief executive Maurice Levy as co-chief executives. The move is designed to bolster the companies' focus on growing Asian and Latin American markets such as China and Brazil, where they each have ramped up operations to counter lackluster growth in weak European markets.

But although a combined firm will allow for more pricing power in general, the decrease in competition could present regulatory hurdles in the US and Europe. Client conflicts also could be an issue, as rivals such as Coca-Cola, PepsiCo, McDonald's, Yum Brands' Taco Bell, Johnson & Johnson and Procter & Gamble now find themselves under the same umbrella.

Omnicom Group, based in New York, owns BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide, among other agencies. Paris-based Publicis Groupe SA runs its namesake agency as well as Leo Burnett Worldwide, Saatchi & Saatchi and DigitasLBi. Their merger creates a company with combined annual revenue of about $23bn, leapfrogging them over current London-based industry leader WPP.

* AP