PARIS: Publicis Groupe and Omnicom Group passed regulatory hurdles on Friday as the antitrust waiting period related to the holding companies' merger came to an end.
With the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expiring, the deal is another step closer to completion.
The groups are on track for closing the deal in early 2014, and the merger approval process is moving forward as expected, Omnicom CEO John Wren disclosed last month in the company's third-quarter earnings release conference call. The exact timing of regulatory clearance cannot be determined, given the number of jurisdictions involved, he added.
Consent from regulatory authorities in Canada, India, and Turkey follow previously disclosed approval in South Africa and South Korea. The HSR review period's expiration in the US, along with the approvals received in other jurisdictions satisfy “some” of the conditions necessary for the transaction to close.
Several gating items stand in the way of the transaction's completion, including tax approvals and SEC filings, said Randall Weisenburger, Omnicom's EVP and CFO, on the earnings call.
Additional global regulatory approvals in 16 jurisdictions, covering 46 countries, and a nod from both companies' shareholders will also be needed before the merger goes through.
“There are still a lot of countries to clear through, but it doesn't seem likely there will be any issues,” said Brian Wieser, senior research analyst for Pivotal Research Group. “This wasn't a combination that was likely to incite any worry from an antitrust regulator's perspective; [this deal] doesn't have any thresholds that typically antitrust rules seek to prohibit.”
Until the transaction is complete, Omnicom and Publicis will continue to operate as two distinct companies.
The companies' announced their plans to merge into Publicis Omnicom Group in July, which will form the world's largest marketing umbrella firm, with combined revenue of $23 billion.
Last month, Publicis and Omnicom hosted their first joint management meeting in Miami, announcing the creation of an integration planning committee that is defining the work processes, as well as the mission for the combined company. PR executives were in attendance, but further information on who was there was not disclosed.
Omnicom declined to offer further information, and Publicis representatives were not available for comment.
Earlier this month, Omnicom reported that its PR revenue grew 4.6% organically in the third quarter to $332.5 million, compared with the previous year.
Publicis Group's North American revenue grew 4.5% organically, year-over-year, in Q3. However, the holding company attributed a slight dip in revenue from the second quarter to “weak performance” in PR activity in the region. The group does not break out revenue for its PR business.
