The planned $35 billion unification between Publicis Groupe and Omnicom Group has been called off because the partners could not surmount the problems to form the world's biggest advertising agency.
The deal, applauded in July as a union of equals which would leap the 2 companies into a more digital era, failed due to complicated tax structure and companies’ different cultures.
The 2 companies had vindicated the planned union as a way to provide capital and scale to deal with technological forces harming the advertising business. Last summer, companies said that the merger would enable them to compete with Facebook and Google which control digital marketing.
Now, with the merger cancelled, the firms have given in their potentially leading status to present leader WPP.
There were a large number of issues over the deal, including failure of the firms to appoint a chief financial officer to take charge of executing the deal.
The selection of CFO, an important position which would decide the way the company would operate, shaping either to Omnicom's less controlling approach to subsidiaries or Publicis' centralized structure, had been a main stumbling block as the months passed.
Tax issues too were problematic as Omnicom required having approval of their plan for tax residency in England, while being legally headquartered in Holland. As the firms tried to stick on merger plan, they had to fight to retain talent and clients.
The merger was planned for a 50-50 ownership division of the equity in the new firm, Publicis Omnicom Group, with Levy and Wren serving as co-CEOs for two and a half years from the closing.