The bosses of Omnicom and Publicis Groupe SA, Maurice Levy and John Wren, came under scrutiny today after the $35 billion advertising merger collapsed citing "complex" issues.
Lévy, 71, who has led France’s Publicis since 1987, said he expected the company will “start reopening the question of succession” by September, although he gave no indication that he will step down imminently.
He and Wren, 61, boss of America’s Omnicom since 1997, axed plans for the merger late last night after months of delays.
“The two companies were not in total agreement — to put it mildly,” said Lévy.
The tie-up, announced last July, was meant to be the crowning achievement of the two men’s careers as they were to become co-chief executives of the world’s biggest advertising group, overtaking Britain’s WPP.
Lévy explained that 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,” he said.
Regulatory and tax issues had led to delays but Lévy admitted there were cultural differences with Omnicom. He felt the Americans were going to put in place executives who did not understand the French group’s culture. The Publicis boss insisted he still felt the merger was “a superb idea”.
WPP boss Sir Martin Sorrell, 69, a long-time rival of Lévy and Wren, did little to disguise his glee at the merger’s demise. “We said in July it didn’t make much sense,” he explained. “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.”
Trade body ISBA, the voice of British advertisers, welcomed the deal’s collapse as it would “allay advertiser concerns over market dominance”. But it is a blow to bankers and lawyers, including Rothschild, which advised Publicis, and Omnicom’s adviser Moelis.