Deal collapse removes threat to WPP
The collapse of the Publicis-Omnicom merger removes the threat to WPP’s position as the industry’s largest group by revenues and delighted its chief executive. After the deal was announced last summer, Sir Martin had found himself uncharacteristically sidelined by the biggest deal ever to be announced in the sector’s history.
Speaking from Beijing on Friday, Sir Martin told the Financial Times: “There was a lack of any real industrial logic behind the merger other than the egos of each side. Each side thought that they would be in charge.” He added that he thought his competitors were concerned about WPP’s development of its business in fast-growth markets, its strength in digital marketing and creative prowess. “Those things started to trouble them.”
Sir Martin spent the nine months since the announcement of his rivals’ deal - which he rebranded “POG” for “Publicis Omnicom Group - campaigning against its logic and saying it would be a boon for his business. He had said that the tie-up would create an opportunity for WPP to scoop up advertising clients and talent that worried of conflicts and culture clashes sparked by the merger.
“We worked hard before the POG announcement, we worked hard after the POG announcement,” he said. “We continue to work hard after the POG obituary.”
Industry executives and analysts had expected WPP to make an acquisition following the Publicis-Omnicom merger so that it would boost its scale to keep pace with its competitors.
WPP will continue to focus on small and medium-sized deals, Sir Martin said, noting that WPP acquired 65 companies last year and has done 25 deals so far this year.
“It is the same appetite that we had before,” he said.