Le Monde Calls Publicis, Omnicom Merger a French Takeover

In 'everything but name'

French newspaper Le Monde has now weighed in on the current differences between Paris-based Publicis Groupe and its potential U.S. merger partner Omnicom in an incendiary piece titled “When (Publicis chief) Maurice Lévy fights for control of Publicis Omnicom Group.”

In an April 29th story, author Valérie Segond described the deal’s original billing as a merger between “equals” as a way to “to make sure the shareholders and American directors of Omnicom accept being bought out by a (smaller) French company.” The article further states that Lévy will be non-executive chair for life—after assuming that role at age 75—following the initial 30-month transition period where he and Omnicom chief John Wren will jointly run the combined company before Wren becomes sole CEO.

Le Monde said Lévy will control nearly 7 percent of the shares in the new Publicis Omnicom Group, on the basis he manages the family stake of Publicis founder Marcel Bleustein-Blanchet, as opposed to Wren, with only 0.4 percent.

After the article’s publication, Lévy responded to Le Monde, saying the report of his controlling 7 percent “is without foundation” as he does not have management responsibility for the family’s holding of 13.3 million shares. In the published response, he made no comment about other details in the piece.

Le Monde noted that "Although significantly smaller, (Publicis,) the third-largest group in the world, manages, due to its very aggressive acquisitions, strategy and its profitability, to have a capital worth that is half of the new group." (In discussing that acquisitive strategy in the current context, Segond wrote "Maurice Lévy has never transferred one ounce of power.") According to Le Monde, Publicis shareholders will have 50.64 percent of the new group; Omnicom shareholders, 49.36 percent. "So is this a takeover in everything but name?" the writer mused.

Segond does not offer sourcing for her assertions. However, Le Monde has ties to the top tiers of French finance circles: One of its owners is Lazard Frères partner Matthieu Pigasse, chief of the investment bank’s operations in France. 

The article’s conclusion suggests that the current testiness between Publicis and Omnicom may reflect an American realization of what they're dealing with in negotiations with the French.

“So, if Maurice Lévy has indeed taken control of his target, why talk about a “merger among equals?” To save face for the Americans and gain their approval, to obtain the suspension of tax on unrealized gains, from the French tax authority, which was a condition of the transaction. But also to remove Publicis’ head office from France without angering the French political and business establishment, which has been its lifeblood for forty years,” Segond wrote. “If it is proved to be a takeover, it will be much more difficult to take Publicis' head office out of France. And perhaps also to do the deal, as is shown by the annoyance of the Americans who are beginning to get the measure of their partner.”