The review period for U.S. regulators to take action against the Publicis-Omnicom merger has expired. The news means U.S. regulators will not oppose or modify the deal, paving the way for the creation of the world's largest marketing communications company.
The waiting period was required under the federal pre-merger notification program established by the Hart-Scott-Rodino Act.
According to the Federal Trade Commission, large mergers can’t close until the HSR waiting period passes or the government grants early termination of the waiting period. In October, when Publicis Groupe chief Maurice Lévy discussed his company’s third quarter earnings, he said a filing had been made in the U.S. with the FTC and while regulatory approvals are a “monumental task,” he didn't foresee any major problems.
The companies also announced they received approval from regulators in Canada, India and Turkey, following previously-announced approvals in South Africa and South Korea. In total, the merger needs to pass review in 16 jurisdictions covering 46 countries, John Wren, Omnicom Group's CEO said during his third quarter conference call. "It's moving forward as expected ... it's going well," Wren told investors.
In preparation for closing the merger, expected in 2014, the two mega-agencies held their first joint management meeting among senior executives to get to know each other better and learn about each other's networks and agencies.
Omnicom and Publicis, the No. 2 and No. 3 marketing communications firms, announced the deal in July.
“The expiration of the HSR review period in the U.S. and the approvals received in other jurisdictions satisfy some of the conditions necessary for the transaction to close,” the companies said in a statement. “The merger is also subject to additional global regulatory approvals and approval by shareholders of both companies.”
The merger of the ad world’s second- and third-largest marketing communications companies will create an industry behemoth with nearly $23 billion in revenue and half of the industry’s agency networks under one roof. Concern has been raised over their combined media-buying clout as Publicis Omnicom Group would control 40 percent of U.S. media buying and 20 percent of the global market.