Interpublic Group of Companies (IPG) shares are surging 14% in premarket trading on a report that Omnicom Group (OMC) is in advanced talks to acquire its rival in an all-stock deal that would form the world's largest advertising company.

According to The Wall Street Journal, the deal could be announced as early as this week and would value Interpublic at between $13 billion and $14 billion, excluding debt. Interpublic shares, which have lost around 10% in value this year, ended trading Friday at $29.26, giving the company a market value of almost $11 billion.

A combined company would have annual net revenue of more than $25 billion, based on 2023 figures. WPP (WPP) currently is the largest advertising firm, with 2023 net revenue of about $15 billion.

Omnicom shares, which have gained almost 20% year-to-date, are down 5% in premarket trading.

Citi Says Deal 'Apt To Be Approved'

In a report Monday, Citi said while investors may anticipate a regulatory roadblock for the deal, with the combined company controlling 48% of the U.S. market, there is plenty of competition with smaller agencies, tech firms, and consulting companies also in the market.

"While regulatory questions will certainly be raised, we believe this transaction is apt to be approved (if it is attempted)," the Citi analysts wrote, noting that "mergers among large agency holding companies are rare." 

Omnicom and Interpublic Group didn't immediately return Investopedia requests for comment.