The world’s largest mega-merger is over before it began–and on the morning after the big breakdown, we have a fairly clear sense of the factors that doomed this would-be deal.
The Wall Street Journal broke the news last night with a joint statement from Messrs. Levy and Wren, who called the uncoupling conscious:
“The challenges that still remained to be overcome, in addition to the slow pace of progress, created a level of uncertainty detrimental to the interests of both groups.”
Their stories quickly and predictably diverged, however.
In the very same article, we have two opposing quotes from Wren:
“We both have strong personalities…but there was no one factor…There was no finish line in sight and that created uncertainty.”
…and Levy:
“For several weeks now, we realized that we were in a dead-end situation…We wanted to do a merger of equals but this principle in the end was not respected.”
Now for the non-statement:
We concluded the challenges and risks related to corporate culture, complexity and time outweighed the potential benefits of the merger.
— Omnicom Group (@Omnicom) May 9, 2014
This morning’s conference call produced more juicy quotes. Levy won the obvious metaphor contest:
“We are divorcing before getting married…We were not totally in agreement, to put it mildly, on how to share the responsibility.”
Then he got a bit more specific:
“I have not been able to convince John that balance is balance. Omnicom wanted their people to fill the CEO, CFO and general counsel jobs…I was not ready to cede on this point.”
So the companies couldn’t decide which one would acquire the other or who would hold the top positions, and Levy began to see it as a Western takeover rather than a meeting of equals. But that’s old news. Wren skipped the “putting it mildly” part:
“It will be a very long time before I try to do a merger of equals again.”
And Wall Street tells us who won:
“Publicis shares were down almost 1 percent, while Britain’s WPP was flat. Smaller French player Havas, seen as a takeover target, jumped 3.4 percent.”
Mr. Sorrell was, unsurprisingly, very eager to let everyone know what he thinks:
“As I said from day one, this was a clunky structure with reverse strategies and regulatory problems.
I think it was an emotional decision. Wren and Levy wanted to knock WPP off its perches. Any deal was doomed to fail.
We obviously made hay while the sun was shining.”
That’s not to say he’s happy the deal fell through, though:
“The best thing for us would be if it had carried on forever.”
Sorrell also had some strategic advice to dispense, suggesting that Publicis and Omnicom clients should “use the uncertainty to negotiate better terms”. Industry analysts seemed to agree with him in predicting that the failure would lead to greater competition between agencies.
On the lighter side, someone else had fun at another’s expense:
Omnicom rolls over, blinks, stares perplexedly into the sleeping face of Publicis, thinks: My head! Where am I? I remember Champagne…
— R/GA (@RGA) May 9, 2014
And finally, the answers to the questions everyone is asking.
Press Release from Publicis Groupe Supervisory Board http://t.co/0v5iBe3qRd
— Publicis Groupe (@PublicisGroupe) May 9, 2014
So “this merger was always one of opportunity, not necessity”, and no one needs to worry because Levy is “very confident in our ability to successfully see this through”. Also:
Omnicom is strong, innovative, energized and ready for the future.
— Omnicom Group (@Omnicom) May 9, 2014
There you have it, then.