Omnicom 'incredibly well prepared' for IPG merger; registers 5.2% growth in 2024

Omnicom chairman and chief executive John Wren has said the group is “incredibly well prepared” for the acquisition of Interpublic Group following the group's annual results for 2024.

In a results presentation, he provided an update on the new group's proposed structure under Omnicom Advertising Group and what the merger will mean for people's jobs.

Omnicom reported 5.2% organic growth in 2024, with revenue of $15.7 billion and net income of $1.48 billion.

Organic growth for the year was 0.2% above the top end of Omnicom's guidance range for the quarter, which chief financial officer Phil Angelastro attributed to the performance of Omnicom’s media business, performance marketing and PR—the latter of which related to the US election.

Organic growth for the fourth quarter was also 5.2%, with revenue of £4.3 billion.

Wren said, "With 5.2% organic revenue growth for both the fourth quarter and full year, and even higher growth in adjusted Ebita and adjusted EPS, our strong operational execution gives us confidence for continued strength in 2025. From this position of strength, we are incredibly well prepared for and excited about the complementary combination of businesses and cultures with our proposed acquisition of Interpublic.”

Rival Publicis Groupe reported its strongest quarter of the year in Q4 on February 5, with an annual revenue growth of 5.8% and net revenues for Q4 up 6.3%, leading chief executive Arthur Sadoun to declare, “Publicis became the largest advertising company in the world in 2024.” 

As Omnicom does not report net revenues its results cannot be directly compared with those of Publicis, and WPP has yet to report its annual results for 2024.

Update on IPG acquisition 

Doubling down on confidence in achieving $750 million in “annual cost synergies” through the acquisition, Wren restated that any related job cuts “will not impact employees dedicated to servicing our clients and generating revenues”.

When selecting roles for the new Omnicom he said the process would be to pick “the best individuals across the organisation, irrespective of their current affiliation”.

Wren added: “With unified practice area leadership teams at a global, regional and country level, we will eliminate redundant roles, functions and back-office operations, which we expect will generate cost savings exceeding $130 million.”

IPG advertising brands, including FCB and McCann, will be aligned with the operating structure of Omnicom Advertising Group as part of the merger. The merged company will be called Omnicom.

Under selling, general, and administrative (SG&A) expenses, Omnicom reported that it spent $14.6 million in acquisition transaction costs related to IPG in Q4 2024.

Compared with Q4 2023, which included $14.5 million of acquisition transaction costs primarily related to the acquisition of Flywheel, SG&A expenses decreased by $3.3 million, or 2.9%, to $112.3 million in Q4 2024.

As outlined in the shareholder prospectus published in January, if it fails to complete the deal, Omnicom must pay a “termination” fee of $676 million to IPG. Similarly, IPG must pay $439 million to Omnicom if it pulls out.