Omnicom, Publicis call off proposed $35 billion merger

Maurice Levy, chief executive officer of Publicis Groupe SA, left, and John Wren, chief executive officer of Omnicom Group Inc., shake hands after signing the merger deal during a news conference at the Publicis headquarters in Paris, France, on Sunday, July 28, 2013. Publicis Groupe SA and Omnicom Group Inc. agreed to merge in an all-stock transaction to create the world's largest advertising company with $23 billion in revenue, toppling market leader WPP Plc. (Balint Porneczi / Bloomberg / )

Publicis Groupe and Omnicom Group jointly announced Thursday that they have terminated their proposed $35 billion merger by mutual agreement.

The parties have released each other from all obligations and no termination fees will be payable by either company.

In a joint statement issued by Publicis Chief Executive Maurice Levy and Omnicom Chief Executive John Wren said:

'The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders. We have thus jointly decided to proceed along our independent paths. We, of course, remain competitors, but maintain a great respect for one another.'

The advertising holding companies have scheduled a conference call for Friday morning at 7:30 a.m. Central time.

The deal, struck last July, would have created the world's largest advertising holding company, surpassing London-based WPP. Regulatory hurdles and reported behind-the-scenes issues had delayed the closing, fueling recent speculation that the so-called 'merger of equals' was in jeopardy.

Bringing together New York-based Omnicom Group and Paris-based Publicis Groupe would have greatly impacted the Chicago advertising market, putting five major agencies into the same international holding company. Chicago-based Leo Burnett is part of Publicis, as is Digitas Chicago. DDB Chicago and Energy BBDO are part of Omnicom. Chicago-based Starcom MediaVest Group, the largest media buying agency in the world, is also part of Publicis.

Putting five major Chicago ad agencies under one holding company could have meant everything from market consolidation to increased leverage. Like their parent companies, those agencies will now remain competitors, under separate corporate umbrellas.

rchannick@tribune.com

Twitter @RobertChannick

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