Interpublic rises 10% while Omnicom slumps nearly 7% on $13.25 billion merger news

Big changes are taking place in the advertising world. Omnicom Group (NYSE:OMC) just broke the news: It’s buying Interpublic Group (NYSE:IPG) in an all-stock deal worth $13.25 billion, creating the largest advertising company in the world . Once things settle at the end of 2025, this mega-merger will bring in total revenue of $25.6 billion and push WPP out of the top spot. Interpublic shareholders will receive 0.344 Omnicom shares for each Interpublic share, with the new company split 60/40 between Omnicom and Interpublic shareholders. And here’s the highlight: This offer is not only large, it is also efficient. Omnicom is targeting $750 million in annual cost savings from the outset.

So what’s the game plan? Think about full-funnel solutions based on cutting-edge data and technology, not just catchy slogans. This combination brings together heavyweights responsible for iconic campaigns like Apple’s “Think Different” and Mastercard’s “Priceless.” Omnicom CEO John Wren called it a move to accelerate innovation and seize opportunities in a world of exponential change. His colleague at Interpublic, Philippe Krakowsky, insisted and emphasized how the merger creates a marketing dream team with global reach and an unrivaled portfolio of services. From media to healthcare to precision marketing, the new Omnicom can do it all and more.

But what about the elephant in the room: regulators? Sure, the new Omnicom will control 48% of the US advertising market. With tech giants and boutique agencies still in the game, they believe this deal will get the green light. Investors seem to agree. Interpublic shares rose 10% after the announcement, while Omnicom fell nearly 7%, a typical buyer reaction in deals of this size. Conclusion? This merger isn’t just about size; It’s about setting the standard for the future of advertising. Buckle up, because this is going to be groundbreaking.

This article first appeared on GuruFocus.