A $31 Billion Ad Deal Shows the Mad Men Are Scared
Omnicom’s deal for Interpublic faces massive risks – from assuaging regulators to retaining clients and staff. But threats from AI mean doing nothing is riskier.
Reshaping a fragmented industry.
Photographer: Timothy A. Clary/AFP/Getty Images
Big deals are risky in most industries but especially in advertising — that’s why it’s so rare to see the so-called Mad Men give them a go. But the antitrust environment is easing, and the traditional marketing business is under pressure. Hence Omnicom Group Inc. is buying the Interpublic Group of Companies Inc. to create a new world number one in advertising. See it as one of the most obvious reactions to more benign conditions for deal making expected under a Donald Trump presidency.
On a narrow view, Omnicom is opportunistically swooping in on an underperforming peer. In late 2021, the firms had roughly the same stock- market value. Since then, Omnicom has been a roll while Interpublic has found it harder to attract and retain clients. At $20 billion, Omnicom’s market capitalization was nearly twice Interpublic’s before the Wall Street Journal reported takeover talks this weekend, enabling it to pursue a deal from a position of strength.