The combined company will be twice the size of WPP in the U.S., but in China, WPP will continue to dominate. CEO Martin Sorrell said WPP currently earns $1.5 billion in revenues in Greater China.
Publicis and Omnicom don't release financial data for the market specifically. Beijing-based consulting firm R3 estimates that 2012 mainland China revenues were $430.9 million for Publicis and $283.2 million for Omnicom. (Estimates converted from renminbi based on average exchange rate for 2012. R3's estimate for WPP's 2012 China revenues was $971.4 million.)
"What we will do is continue to build our business in China in exactly the same way as we have done, which is largely organic," Mr. Sorrell said.
China is poised to become the world's second-largest ad market in the next couple years, if not sooner, but it has been a longtime focus for Mr. Sorrell. WPP entered the market earlier than its competitors and invested heavily. Today, WPP has 16,000 staff in China and derives 40% of its revenues from local marketers.
Mr. Sorrell said he recently visited 17 Chinese marketers over two weeks, including some in the western cities of Chengdu and Chongqing.
"The conventional wisdom in the West is Chinese companies steal intellectual property but nothing could further from the truth. They're innovative, they understand marketing and Randy Weisenburger is totally wrong," he said.
Mr. Sorrell was referring to a news article from last year in which Mr. Weisenburger, Omnicom's CFO, said Chinese companies don't want to pay for high-end marketing services.
Omnicom has traditionally been U.S.-centric and slower off the blocks in China. Now, with fewer targets still available for acquisition, a top Omnicom exec in China has said the company may need to import talent from other markets to bring in additional capability. The holding company's business in China is skewed toward major multinational clients.
Publicis has made numerous acquisitions in China over the past few years, in keeping with its overall strategy of developing digital expertise. It reported an organic growth rate of 14.7% in China in 2012, and VivaKi is one of the most powerful media buying agencies in the market.
Publicis Groupe Chief Operating Officer Jean-Yves Naouri is the company's point man on China, committing to traveling to the country once a month. Publicis' goal was for China to become its second-largest market by 2015.
With such disparate China strategies coming into the merger, it's not clear how the new Publicis Omnicom Group will tackle the market going forward.
An Omnicom spokesman said Serge Dumont, Omnicom Group vice chairman and chairman of Asia-Pacific, was unavailable to comment and referred questions to New York headquarters. Mr. Naouri did not respond to an emailed request for comment by press time.
One industry analyst said potential obstacles for the deal in China, like in other markets, are anti-trust issues on the media-buying side. The combination of Publicis' Vivaki, already dominant in China, with Omnicom's Omnicom Media Group may raise flags.
"They would have a very clear advantage in terms of total buying volume," said the analyst, who spoke on condition of anonymity due to the sensitivity of the topic and the merger's impact on his agency clients. It's too early to say whether Chinese authorities will question the merger.
Publicis Omnicom Group's co-CEOs-to-be, Maurice Levy and John Wren, have said they don't expect any regulatory problems.