NEW YORK: Advertising and marketing conglomerate Omnicom Group is in advanced talks to acquire Interpublic Group in an all-stock deal that is likely to value Interpublic at between $13 billion and $14 billion, excluding debt, the Wall Street Journal reported on Sunday.
The deal, if reached, would be expected to attract regulatory scrutiny as it seeks to merge the world's third-largest ad buyer - Omnicom - with the fourth-largest - Interpublic. Both companies are based in New York.
Interpublic owns brands such as McCann, Weber Shandwic and Mediabrands, and had a market value of around $10.9 billion as of Friday. Omnicom was valued at $20.2 billion and owns the likes of BBDO and TBWA.
Interpublic's shares have fallen 10.36% year to date to $29.48.
A transaction could be announced as early as this week, the report said, adding that the exact terms of the deal being discussed could not be learned.
The combined revenues would be more than $20 billion, based on 2023 figures. That would compete with the UK's WPP and France's Publicis Groupe SA, which generate revenue of $15 billion and $13 billion, respectively.
The rise of in-house AI tools provided by third-party vendors or digital platforms is challenging traditional advertising agencies, as clients look turn to cheaper and faster alternatives.
In 2013, Omincom and Publicis called off a $35 billion merger after regulatory roadblocks, which also would have created the world's biggest advertising group.
Omnicom and Interpublic did not immediately respond to requests by Reuters for comment outside of business hours.
The recent strong performance of Publicis runs counter to a general slowdown in the advertising industry, which is seen as a bellwether for broader economic health. The CEO of Publicis credited its implementation of AI to further drive its business, adding it has many projects in the pipeline waiting to be released once market conditions improve.
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