Interpublic Group Surges After EU Grants Final Approval for $13.3B Omnicom Merger
Unconditional clearance from the European Commission paves the way for the creation of the world's largest advertising agency, targeting $750 million in annual synergies.
Interpublic Group (NYSE: IPG) shares jumped nearly 5% on Monday after the European Commission granted unconditional antitrust approval for its $13.3 billion all-stock acquisition by rival Omnicom Group (NYSE: OMC), removing the final regulatory hurdle for a deal that will reshape the global advertising landscape.
The long-awaited decision sent shares of Interpublic up 4.8% to $25.72 in morning trading, while Omnicom’s stock rose in concert, gaining 4.7% to $74.87. The move clears the path for the formation of the world's largest advertising and marketing conglomerate, a behemoth with combined annual revenues estimated at over $26 billion.
The European Union’s executive body concluded that the merger would not significantly impede competition in the European Economic Area. In a statement released Monday, the Commission noted that "the transaction would not raise competition concerns, given in particular the presence of a sufficient number of alternative players."
This approval marks the culmination of a nearly year-long process since the deal was first announced, aimed at creating an industry titan with the scale to compete more effectively against technology giants like Google and Meta, which now dominate digital advertising. The merger is also a strategic response to the growing trend of clients moving marketing functions in-house and the industry-wide pivot toward AI-driven data analytics.
The combined entity, which will operate under the Omnicom banner, is projected to generate significant efficiencies. Executives have targeted approximately $750 million in annual cost synergies, primarily from consolidating overlapping agency services, real estate, and back-office operations. Both companies have already undertaken significant restructuring in anticipation of the integration.
Omnicom CEO John Wren has highlighted that the most significant synergies are expected from combining the company's vast media buying operations, its healthcare marketing portfolios, and its precision marketing units. The acquisition of IPG brings valuable assets, including the data-marketing powerhouse Acxiom, which is expected to be a critical component of Omnicom’s forthcoming marketing operating system, Omni Plus.
The deal dramatically reorders the hierarchy of the advertising world, leapfrogging competitors like WPP and Publicis Groupe. Analysts see the move as a necessary consolidation in a sector facing profound disruption. By combining their creative agencies, media planning networks, and public relations firms, the new Omnicom aims to offer a comprehensive, data-rich suite of services that can rival the offerings of both traditional competitors and new-era tech platforms.
Investor confidence has been building as the deal moved closer to completion, with several institutional funds increasing their stakes in Omnicom. The finality of the EU’s decision now shifts the market’s focus to the complex task of integration. While the potential for cost savings is significant, analysts note that the merger carries execution risks, including potential client conflicts, cultural clashes between agency networks, and the challenge of retaining top talent during the transition.
With regulatory approval secured globally, the companies are expected to move swiftly toward closing the transaction. The successful integration of Interpublic’s agencies, such as McCann and FCB, into Omnicom's portfolio, which includes BBDO and DDB, will be critical to realizing the full strategic value of the merger and justifying the historic consolidation.