Sir Martin Sorrell, chief executive of the former largest media group in the world, WPP, has voiced doubts over the Publicis-Omnicom merger that shocked the world on Monday morning, describing the move as a "big opportunity" for his agency.
With WPP's $16bn of revenues outstripped by the combined $22bn of Publicis-Omnicom, Sorrell questioned the factors affected by the grandiose new partnership - pouring scorn on the 'merger of equals' tag-line favoured by Messrs Lévy and Wren.
"Clients really have not been taken through the pros and cons of this in
any great detail and it's going to be very interesting to see what
happens," he mused in an interview with CNBC.
"If I were an Omnicom shareholder I would be extremely
concerned about a merger of equals when the company I invest in has
$14bn of revenue, while Publicis has only $8bn.
"Time will tell if the cultures will click and whether clients and
talent benefit – and how $500m of synergies will be generated without
job cuts. Co-CEOs is not an easy structure. Having
said all that I think it's a tremendous deal for Publicis. It's an
extremely bold, brave and surprising move … but we'll have to see how
this all plays out."
With Publicis-Omnicom now comprising of over 130,000 global employees, industry analysts have mused over what repercussions may have over client retention - as rivals Apple and Samsung, as well as PepsiCo and Coca-Cola are now under one umbrella, and could yet to look to WPP. But the new Gallic-American advertising axis profess an air of sang-froid over any threat from their British rival.
“Martin
Sorrell is a strong competitor, a very strong competitor, we respect
WPP enormously,” Mr Lévy said.
“We do not define our
strategy as regard to what he will think or what he will do.”
Sir Martin, though, seems to be enjoying the challenge that comes with this change to the landscape, surreptitiously throwing backhanded compliments after WPP shares rose 2.1% following their rivals' announcement.
"This is a seismic shock to the industry and this will make clients and
people think about what they're doing," he smiled.
"This gives us a big
opportunity."
Tuesday, July 30, 2013
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