A Dead POG May Trigger More Adland Consolidation

POG may be a fading memory now, but more big Adland mergers may be on the way.

In his note on the cancellation of the Publicis-Omnicom merger, Pivotal Research analyst Brian Wieser posits that the Interpublic Group remains a “likely seller.”

“The question is not whether or not there will be bids,” for IPG, Wieser writes, “but at what price IPG would sell, especially considering it should have a strong year on an operating basis.”

And Publicis Groupe is clearly a top candidate to buy IPG, the New York-based owner of McCann and FCB, among other shops. “Publicis always had clear designs towards gaining scale,” Wieser added. And if IPG doesn’t present enough new scale for Paris-based Publicis, “a scenario which might be worth considering now is Publicis raising capital and bidding for Omnicom outright with a mix of shares and cash.”

That said, don’t expect Omnicom to be a willing seller, Wieser surmised.

Other holding companies that are likely buyers, per Wieser, are Dentsu and Havas.

“Dentsu’s global ambitions are in place, and having integrated Aegis it is better positioned now than it was [a year ago] to pursue further scale, especially with creative agencies,” Wieser states. As for Havas, “IPG is the optimal candidate among the bigger holding companies if Havas can gain access to capital.”

With the scale they already have, Wieser doesn’t see either WPP or Omnicom doing a holding company-sized acquisition. WPP, he wrote, has “focused efforts more towards technology and data-based services in recent years, and seems unlikely to move from that path.”

Omnicom, added Wieser, can probably best profit from a “return to normalcy.” Omnicom “is not clearly a buyer of anything other than its own stock,” at this point. “The most obvious path for Omnicom is business as usual.”

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