Sir Martin Sorrell's WPP is celebrating after the dramatic collapse of the merger between Publicis and Omnicom that had threatened to usurp the British company's status as the world's biggest advertising group.
Maurice Lévy, chairman and chief executive of France's Publicis, and John Wren, his counterpart at America's Omnicom, axed plans for the £23bn deal because of regulatory delays and a power struggle, as they failed to agree how to run the combined company.
Mr Lévy admitted that the "uncertainty" had been harming both companies, although he insisted there had not been an exodus of clients or talent.
He said calling off the wedding was better than a divorce. "It is much better not to go to the church than to go to the judge," insisted the Publicis chief, sounding tired in a call to investors yesterday after the deal was called off late on Thursday. "We are divorcing before we get married."
Mr Wren, speaking separately, admitted: "I think it would be a very long time before I try to do a merger of equals again."
Mr Lévy conceded there were cultural differences with Omnicom. He felt the American firm was going to put in place executives who did not understand the French group's culture. "The two companies were not in total agreement, to put it mildly."
The failed deal raises questions about the long-term futures of both Mr Lévy, who has run Publicis since 1987, and Mr Wren, who has headed Omnicom since 1997.
Mr Lévy said he expected that Publicis will "start reopening the question of succession" by September, but gave no indication he would step down imminently.
The decision last July of the two leaders to merge their companies was widely seen as an attempt to outdo their shared adversary Sir Martin.
Jefferies, the investment bank, said the merger collapse was "arguably the best possible outcome" for WPP.
Sir Martin said: "I think Maurice seduced John with his traditional Gallic charm, and John fell for it."
The WPP boss made fun of Mr Lévy's marriage analogy, saying the split had come after they had in effect tied the knot. "It's as if they were walking down the aisle after the marriage and then Maurice changed [the terms of the deal]. John found it wouldn't be on his terms."
He went on: "We said in July it didn't make much sense. I think it was done more for emotional reasons and egotistical reasons, There was no strategy explained to people and clients, and ultimately that's why it fell apart."
Shares in Publicis fell just 1 per cent and Omnicom less than 0.5 per cent as shareholders appeared relieved.Reuse content