How the Omnicom-IPG merger came together—a timeline of key events and negotiations

Omnicom Group and Interpublic Group of Cos. today provided the first major update on their proposed merger since they announced the deal in December. The summary of the material events leading up to the signing of their merger agreement, including key meetings, negotiations, discussions and actions by and between both parties and their respective advisors, provides a closer look at how the massive deal—poised to create the world’s largest ad agency group—came together over the course of a year. Ad Age has compiled the key moments chronologically below, based on information provided by the companies in their joint proxy statement/prospectus filed with the U.S. Securities and Exchange Commission late today. According to the filing, the proposed deal hinged on a few key factors, including IPG CEO Philippe Krakowsky’s role post-merger, IPG’s valuation and Omnicom retaining its name, headquarters and OMC ticker symbol on the New York Stock Exchange. Also read: Philippe Krakowsky’s golden parachute The SEC filing also lays out termination fees each party would have to pay the other if the deal falls apart under certain circumstances, with IPG required to pay Omnicom $439 million, and Omnicom required to pay IPG $676 million. Tracking the latest Omnicom-IPG merger news and analysis July 2023 IPG CEO Philippe Krakowsky started considering IPG’s options and alternatives, engaging in a series of exploratory meetings and telephone calls with potential financial and strategic counterparties, including with Omnicom. These strategic alternatives included acquisitions, the sale of IPG’s digital specialist agencies and other dispositions, spin-off/split-off transactions, a third-party private investment, a take-private and various strategic business combinations. IPG’s executive management team also began to explore various internal alternatives, including restructurings, cost-savings measures and expanding IPG’s media buying offerings. August 2023 Krakowsky had several meetings and telephone conversations with representatives from a private equity sponsor (described in the filing as “Private Equity Sponsor A”) to discuss a potential strategic transaction. During that time, he also spoke with representatives from a strategic counterparty (“Strategic Party A”) regarding a potential business combination. December 2023 Dec. 12: IPG received an unsolicited proposal from “Strategic Party A.” Dec. 14: IPG’s board discussed various alternative strategies to grow the business, including potential deals with different partners, including the private equity firm, “Strategic Party A” and Omnicom. Following the meeting, IPG decided to not move forward with “Strategic Party A” and its proposal given its “lack of specificity.” January 2024 Krakowsky and Omnicom Chairman-CEO John Wren met in person to discuss the “rapidly evolving nature of the industry and adjacent sectors,” as well as factors that would “drive value in media and marketing in the years to come.” Wren previously told Ad Age that it was at CES last year that acquisition talks between the two companies first began. February 2024 Wren and Krakowsky have a phone conversation where they discuss a potential merger. Feb. 28: IPG received a second proposal from “Strategic Party A” regarding a potential merger. However, IPG declined to move forward with the proposal because it lacked specifics on “key economic terms” such as an exchange ratio, which is a term used to calculate how many shares of a company are exchanged for each share of another company. June 2024 Krakowsky and Wren discussed more actively exploring a potential merger between IPG and Omnicom. IPG’s executive management team continued to explore other potential strategic alternatives—both internal and external—and began to “broaden its buying capability within its media practice in response to market changes.” (In October, Krakowsky said IPG would be investing more in building out principal-based media buying services in response to a changing media landscape.) July 2024 July 18: Omnicom’s board held a meeting with Omnicom’s executive management team and representatives of PJT Partners and Latham & Watkins LLP to discuss a potential deal between IPG and Omnicom, where the latter would acquire the former in an all-stock merger. Omnicom’s board formed a transaction committee. In the same month, Wren told Krakowsky that Omnicom was beginning to formulate a proposal to acquire IPG in a stock-for-stock transaction, which Wren expected would be an “at market” transaction. August 2024 Wren presented Krakowksy with the proposal. Krakowsky subsequently informed Wren that IPG would not likely support a deal that doesn’t have a premium for IPG’s stockholders. September 2024 In early September, Krakowsky had an in-person meeting and subsequent phone call with a representative of Strategic Party A, during which the representative told Krakowsky that Strategic Party A was considering a stock-for-stock merger between the two entities, but did not expect to be able to offer a premium to IPG’s stockholders. During the prior three months, Krakowsky also had several in-person, virtual and telephone meetings with representatives of Private Equity Sponsor A, who, after discussions with potential co-sponsors, informed Krakowsky in September that Private Equity Sponsor A did not expect to get the money needed for a deal. Sept. 9: The Omnicom transaction committee discussed the potential exchange ratios to be considered for a revised proposal to IPG, as well as a governance proposal to add two directors designated by IPG to the Omnicom board. It also discussed appointing Krakowsky as co-president and co-chief operating officer of Omnicom, alongside current president and chief operating officer Daryl Simm. The transaction committee then authorized Omnicom’s executive management team to prepare a proposal to IPG. Sept. 14: Following a phone call between Wren and Krakowsky, Omnicom delivered IPG a proposal that contemplated Omnicom acquiring all of the outstanding shares of common stock of IPG in a stock-for-stock transaction at a fixed exchange ratio of 0.330x, which represented a 6.9% premium to IPG’s closing stock price on the prior trading day and implied an approximately 38.5% pro forma ownership in the combined company by IPG’s stockholders. The letter also proposed that two current members of the IPG board would join the Omnicom board, that Wren would continue to serve as chairman and CEO of the combined company and Krakowsky would serve as co-president of the combined company, among other things. October 2024 Oct. 8: IPG’s board discusses Omnicom’s offer and a potential response. IPG’s board estimates a potential $500 million and $600 million in “synergies,” which is the additional value created from a merger through either cost savings or increased revenue. IPG’s board also discussed the importance of Krakowsky having a “meaningful role in the combined company” if financial terms can be agreed upon. Oct. 10: Krakowsky delivered IPG’s written letter responding to Omnicom’s offer. In the letter, IPG claimed that Omnicom’s offer did not fully reflect IPG’s value. Krakowsky also spoke with Wren later that day to reiterate the point and said that there would need to be an improved “exchange ratio” for conversations to continue. Oct. 30: Omnicom delivers a new proposal to IPG that would have Omnicom acquire IPG’s outstanding shares at a 14.5% premium and IPG’s stockholders would own 39% of the combined company. In the letter, Omnicom also proposed that the company would maintain Omnicom’s name, corporate headquarters and ticker symbol. November 2024 Nov. 5: IPG’s board holds a special meeting, where the updated proposal is reviewed. After discussion, the board determined that the proposed exchange ratio was still “insufficient” and instructed Krakowsky to work with Omnicom to “try to achieve an enhanced proposal.” Nov. 6: Krakowsky delivered the news to Wren, and the two discussed whether Omnicom would be able to improve its offer. Nov. 13: Wren called Krakowsky to inform him the Omnicom board would be considering IPG’s feedback on the October 30 letter and that a subsequent proposal, reflecting Omnicom’s “best and final” offer, was expected to be forthcoming. Nov. 18: Omnicom delivered IPG another proposal, one which contemplated Omnicom acquiring all of the outstanding shares of common stock of IPG in a stock-for-stock transaction at a fixed exchange ratio of 0.344x, which represented a 23.0% premium to IPG’s closing stock price on the prior trading day, and approximately 39.4% pro forma ownership in the combined company by IPG’s stockholders. The letter stated that Omnicom believed it was critical to sign and announce a transaction by Dec. 9, 2024, to “provide sufficient time to communicate with the companies’ various stakeholders prior to the year-end holiday period.” IPG’s board and executive management team held a special meeting the same day, in which the board discussed the importance of Krakowsky “having a meaningful role during the integration period and in the go-forward combined company.” The IPG board also discussed whether to approach additional parties that could be interested in a potential deal with IPG before entering into a transaction with Omnicom. It determined it was willing to proceed with the Omnicom deal in part after concluding it was “unlikely that an alternative bidder would make a more attractive proposal within the desired timeframe.” Nov. 19: Krakowsky “communicated agreement on the exchange ratio” and “a willingness to engage in mutual due diligence and progress the transaction documentation while continuing to negotiate the other open terms.” December 2024 Dec. 3-4: Wren and Krakowsky discuss multiple topics, including termination fees, if the merger were to fall through and the importance of key employees that would be discussed at a later time. Wren offered Krakowsky a directorship on the post-closing Omnicom board. Wren acknowledged the proposed role for Krakowsky at the combined company would “not be equal to his position at IPG” and could also result in a significant reduction in his compensation. Wren offered for Krakowsky to be paid equal to what he owns in IPG equity and “performance cash awards,” in accordance with his executive change of control severance agreement. Dec. 4: David Thomas, IPG’s board chair, called Wren to express the holding company’s “strong desire” for Krakowsky to have a “meaningful role in integrating the two businesses” and in the newly formed ad giant. Thomas also authorized Krakowsky to negotiate with Omnicom regarding his potential role with the combined company. Dec. 5: Omnicom reviews final details of the deal. Omnicom’s management agrees that the new combined company is anticipated to yield $750 million in annual cost synergies following the completion of the merger, “the majority of which are anticipated to be achievable within 24 months of closing of the merger.” Dec. 7: Krakowsky’s employment terms with Omnicom are finalized. Dec. 8: Omnicom and IPG execute the merger agreement. Dec. 9: Before the market opens, the parties issue a joint release announcing the deal, followed by a conference call to discuss specifics of the transaction. Become an All Access subscriber Get access to exclusive resources including Leading National Advertisers, World’s Largest Advertisers, Agency Report, Agency Review Tracker and TV Pricing Report. Click here

How the Omnicom-IPG merger came together—a timeline of key events and negotiations

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