The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, Dec 9 (Reuters Breakingviews) - Omnicom is buying rival Interpublic to create the largest ad network, with agencies including BBDO and McCann. Chunky savings worth nearly $6 bln help the merger stack up financially. As AI threatens to upend the industry, however, it’s hard to spin it as anything but defensive.

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CONTEXT NEWS

Omnicom said on Dec. 9 that it had agreed to buy rival advertising conglomerate Interpublic in a $13.3 billion all-stock deal that would unite agencies such as BBDO and McCann Worldgroup and create the industry’s biggest company with nearly $26 billion of combined revenue in 2023.

Under terms of the transaction, Interpublic shareholders will receive 0.344 Omnicom shares for each Interpublic share they own. After completion, Omnicom shareholders would own 60.6% of the combined company and Interpublic’s the rest.

The companies expect to generate annual cost savings of $750 million and that, subject to approval from regulators and both sets of shareholders, the deal will close in the second half of 2025. Omnicom Chairman and CEO John Wren will keep both roles, and three Interpublic board members are slated to be added to Omnicom’s board.

PJT Partners is advising Omnicom and Morgan Stanley is advising Interpublic.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))