The Publicis-Omnicom merger turned out to be a “shattered dream,” but it wasn’t entered into by Publicis Groupe out of necessity.
That’s how Publicis Groupe CEO Maurice Levy positioned the collapse of what would have been Adland’s biggest merger at the company’s annual meeting on Wednesday.
Levy also touched on the company’s succession plan--now that the merger is off-- saying that the company’s supervisory board will begin drawing up a new plan in the fall and next year come back with an “appropriate solution.”
Noting that he is now 72, Levy said he was “starting to sort of sag. I have to get ready” to leave the CEO post at some point. “Everything has to come to an end,” he said. “There will come a day when I have to walk out, gracefully I hope.” But he also said that he would “help the company as long as I can, as long as I am welcome.”
Levy said the proposed merger was a “wonderful opportunity” to create a new industry leader by combining the two companies. It would have “transformed the way we work,” Levy said, and presented “new opportunities” for both clients and staff alike.
But as the merger approval process dragged on for months longer than anticipated, Levy said it became clear that the companies had greater differences than he realized at the outset of the process.
As that process dragged on, he told investors, the so-called “merger of equals” looked more like a “very unequal merger” that if completed would have “diluted our business model,” referring to Publicis Groupe.
Ultimately, Levy said, the Publicis management and advisory boards decided “not to do something contrary to what we had planned for.” And, he added pointedly, “when we give our word, we keep it.”
Thus, “we got divorced before we got married,” which he joked makes it easier because “you don’t have to count the silverware or decide who gets custody.”
Levy said that the company is well positioned for the coming year and beyond, but warned that the second quarter would be weaker than the first quarter, which produced organic revenue growth of 3.3%. The second half of 2014 is expected to be stronger than the first half.
The company’s “ambition” he said, was to achieve more than 4.4% organic growth for the full year. But to do it, he acknowledged, “we’ll be coming from a long way back.”
Levy also said that the company intended to accelerate plans for expanding the company’s digital assets with the objective of generating 50% of all company revenues via digital by 2018. A revised strategic plan to that end will be finalized in the fall.
Asked how he felt about the constant digs taken at the merger by rival WPP CEO Martin Sorrell, Levy replied that it was “less than pleasant to hear such remarks,” but that “all is
fair.” The real issue isn’t Sorrell’s sarcasm, he said, but whether the process impacted Publicis Groupe’s ability to do business, which it did not.
“Failure makes you more aggressive and better,” he said. “We were not trying to wage of a war of words with our English competitor, but to engage in a market war to gain market share.”
And, Levy added, the company will take whatever steps are necessary to gain market share in the future.