Mergers and Acquisitions - Omnicom Group and Publicis Groupe - Research Paper Example

The latter is a French public relations and multinational advertising while the former is a US global advertising, sales and marketing, and corporate communications company which was based in New York City. In July 2013, the two firms agreed to come together in a merger to form the Publicis Omnicom Group. The far-reaching extent of the merging process underscores the complex nature of the process.

There are clear circumstances that drove the Omnicom Group and Publicis Groupe into the merger. The two companies needed to come together so as to be bigger as an artifice to weathering the competition that had widely characterized the market. The Omnicom Group and Publicis Groupe had surmised that when they merged, they would consolidate their thousands of employees and their billions of dollars of capital and assets and create a robust workforce of 135,000 employees. Thus, it is clear that the Omnicom Group and Publicis Groupe wanted to create and exert greater synergy and capital as a way of managing the storm of competition in the market and being a more formidable player in the market.

The two companies had also intended to limit the scope of their operational expenditure by coming together. The rationale behind this idea is that both companies were using a lot of capital to run their business and upon coming together, the Omnicom Group and Publicis Groupe would share operational expenses and thereby limiting the risks that accost their business operations. For instance, in 2012 alone, both companies had spent 500 billion US dollars on advertising themselves. This kind of burden would be lighter if the Omnicom Group and Publicis Groupe came together in a merger.

The merger was also informed by the technological transformation that the advertising industry has undergone. The technological advertisement had caused the collection and sale of personal information of millions of consumers to take on greater importance. This state of affairs became more complex and pronounced as independent companies such as Facebook and Google began using their huge pool of user data to post advertisements and thereby easily and swiftly bypassing conventional advertising agencies such as the Omnicom Group and Publicis Groupe.