WPP boss Sir Martin Sorrell blasts Publicis and Omnicom merger deal
Friday 25 April 2014
WPP chief executive Sir Martin Sorrell today mocked advertising rivals Publicis and Omnicom over the tax problems with their delayed mega-merger, saying “it’s turning into a soap opera”.
He said clients were reacting to the uncertainty as his company won nearly £1 billion in new billings in April alone. Revenues in the first three months of the year jumped 7% on a like-for-like basis — ahead of growth at Publicis and Omnicom.
WPP shrugged off sterling’s recent strength as sales rose 1.5% on a reported basis to £2.57 billion.
Advertising is seen as a bellwether of the economy and the UK was strong as revenues climbed 10.7%.
Last July Maurice Levy, boss of France’s Publicis, and John Wren, head of America’s Omnicom, announced merger plans to create the world’s largest advertising group, overtaking WPP, but they have had to admit in recent days that it is taking longer than expected to persuade regulators in France, the UK, the Netherlands and China.
Sorrell told the Evening Standard: “It’s turning into a soap opera. Clearly John Wren and Maurice Levy are unhappy with each other. If you listen to the two first-quarter conference calls, it was like two ships passing in the night. Levy said there was only one tax problem — with the French. Wren a couple of days later contradicted him.”
The WPP boss suggested doubts about the tie-up have increased. “Both companies have said if they merge, it’ll be fine and if they don’t merge, it’ll be fine. The PR positioning has dramatically changed.”
Sorrell added that WPP, owner of agencies such as Ogilvy & Mather and AKQA, had enjoyed a “surge” in new business wins partly as a result of the merger uncertainty, as clients “react” to the changing landscape.
Just in April, WPP picked up almost £1 billion in billings by winning Marks & Spencer, Vodafone, Compare The Market and Pepsi in China.
Publicis said earlier this week that it was still “confident” of winning regulatory approval for a deal in which the combined company would be registered in the Netherlands and resident in the UK for tax purposes.
However, some analysts believe that both Dutch and UK regulators have raised questions, against a background of tax avoidance shooting up the political agenda.
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