There’s been speculation about an M&A deal involving Publicis Groupe for several months and now the proposed acquirer has been disclosed: Procter & Gamble has agreed to pay $30 billion for the ad holding company.
For years, the CPG giant has been cutting back its ad agency roster. Now, it plans to do all its advertising and marketing work in-house via the deal, its biggest since buying Gillette in 2005.
According to the company, the deal will be accretive from day one. The firm now uses fewer than half the agencies it once did, saving $500 million or so annually in the process. Once the deal is complete, all advertising and marketing work will go through Publicis agencies.
The deal was driven by P&G’s marketing chief Marc Pritchard and Publicis CEO Arthur Sadoun.
Pritchard noted he’s gotten to know Sadoun over the years, largely through gatherings and meetings at the annual Cannes Lions Festival of Creativity that takes place every June. “My French is almost coherent now,” said Pritchard. “And Arthur’s English seems improved every time I talk to him, so it’s a great fit.”
Sadoun acknowledged some pressure to find a buyer, given the desire of certain large shareholders to cash out their holdings.
“We have a lot momentum going right now, especially with Marcel mostly functioning the way we planned around the world,” he said. “And our Power of One model is the envy of the industry. Everyone is trying to copy it.”
The sale to P&G is by far the largest M&A deal Sadoun has orchestrated. “But with Maurice looking over my shoulder the whole time, what could go wrong?”
P&G CEO David Taylor commented: “It’s no secret marketing ROI has been suspect for a long time. I just hope Marc knows what the hell he is doing. He tells me he does, and I believe him. For now.”
Have a prank-filled April Fool’s Day.