In a blockbuster merger between two advertising titans, Omnicom Group (OMC) will acquire its rival, Interpublic Group (IPG), in an all-stock deal valued at $13.3 billion. Following the announcement, IPG surged by more than 10% in pre-market trading.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
How Will OMC Acquire IPG?
According to the terms of the deal, Interpublic shareholders will receive 0.344 Omnicom shares for each Interpublic share they own. After the acquisition closes, Omnicom shareholders will hold 60.6% of the combined company, while Interpublic shareholders will hold the remaining 39.4%. The deal is expected to generate $750 million in annual cost synergies and will be accretive (gradually incremental) to the adjusted earnings per share of both companies.
Furthermore, the deal is expected to close in the second half of next year.
OMC’s Management Comments on the Acquistion
John Wren, Chairman & CEO of Omnicom, commented, “This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms, enabling new offerings to better serve our clients and drive growth.”
Additionally, the merger will bring together highly complementary assets, creating a robust portfolio of services and products that will immediately expand client opportunities for the combined company.
Is OMC a Good Stock to Buy?
Analysts remain bullish about OMC stock, with a Strong Buy consensus rating based on five Buys and one Hold. Over the past year, OMC has surged by more than 20%, and the average OMC price target of $118.17 implies an upside potential of 14.3% from current levels.
