“We agreed we’d have balance in the management team and I have not been able to convince John that balance means balance,” Maurice Levy, head of the French-based advertising agency Publicis, said late last week during a two-hour conference call following the announcement of the split. “It’s disappointing we had this dream which is not going through, but it’s better not to go to the church rather than going to the judge. We are divorcing before getting married.”
The $35 billion dollar proposal to merge the U.S.-based Omnicom and its French rival Publicis, poised, together, to become the largest ad agency in the world, has fallen apart.
The two firms had decided on the merger as a way to dethrone WWP in the advertising game, as well as compete with the digital forces, such as Facebook and Google, tearing away their client and consumer bases. But the task proved too complicated for John Wren, the 61-year-old CEO of Omnicom, and his 72-year old Jewish counterpart from Paris, Maurice Levy.
Agreements couldn’t be reached as it related to key management positions, CFO being the largest of the contentions, and an initially forecasted six-month timetable for the merger was replaced by a process that looked to have no foreseeable end. Added to this was a wickedly complex tax structure involving structuring in different countries and a clash of divergent corporate and cultural identities.
“There was no one factor,” said Wren. “There are a lot of complex issues we haven’t resolved. There are strong corporate cultures in both companies that delayed us from reaching an agreement. There was no clear finish line in sight.”
“The decision to discontinue the process was neither pleasant nor an easy one to make, but it was a necessary one,” said Levy.
Perhaps the contrast of personalities in the two bosses was something not taken into account initially, as well. This from a Bloomberg news article related to the two: “The two men’s union seemed unlikely from the start. Levy is a garrulous celebrity CEO who’s a regular presence on television and at media conferences; an American journalist once vividly described his instructing her in the art of hand-kissing. Wren, by contrast, is more reserved, and rarely granted interviews before the Publicis deal was announced.”
Levy was born in Morocco in 1942. His father, a left-winged activist in southern France, had fled to Morocco ahead of the Nazis.
Maurice joined Publicis in 1971, and became CEO in 1987. He had previously postponed retirement as succession was a key issue in the negotiations with Omnicom. With the deal’s collapse, it’s likely he’ll revisit the idea before long.