It’s the biggest public company merger of 2013 so far, and it is making serious waves. Five firms including Latham & Watkins and French outfit Darrois Villey Maillot Brochier have won roles advising on the merger of the world’s second and third largest ad agencies. The tie up of America’s Omnicom Group and France’s Publicis Groupe will create a $35bn company, overtaking WPP as advertising’s top dog.
It’s not the first big ad agency deal in recent months. In March, firms including Linklaters and Slaughter and May closed a £3.2bn deal between agencies Dentsu and Aegis to create the Dentsu Aegis Network. Industry eyes are now turning to the advertising world’s other big players such as Havas and Interpublic in case they opt to follow suit.
All this movement in the advertising world slots into line with the wider TMT market. In fact, according to a report by A&O, a firm of choice for WPP, global TMT deals increased by 113 per cent in Q1 2013 compared to the same period last year. Among the biggest deals were Liberty Global’s $23.3bn (£14.9bn) acquisition of Virgin Mediaand the $24.4bn (£15.5bn) leveraged buyout of Dell by its founder Michael Dell.
The well doesn’t look set to dry up any time soon with Telefonica just last week announcing its €5bn (£4.3bn) purchase of Dutch telecoms company KPN’s German mobile unit E-Plus. Allen & Overy, CMS Hasche Sigle and McDermott Will & Emery scooped lead roles on the transaction.
Whether it’s TMT in general, or ad agencies in particular, public M&A deals look likely to be rich pickings in the coming months.