Publicis – Omnicom Merger Breaks Up Over Culture Clash

Pubicis and Omnicom have called off their proposed $35 billion merger that would have created the largest advertising agency in the world. According to reports, Publicis CEO Maurice Levy and Omnicom CEO John Wren disagreed over many details, including filling key management positions and corporate structure.

This comes as no surprise to me. Ten months ago when the deal was announced, I suggested cultural integration would be a significant challenge for this cross-border deal between two established companies with strong corporate cultures. After all, acquisition success means integrating two companies into one business that works as a cohesive unit. Talk about the strategic value or synergies of a deal all you want, but if the CEOs can’t come to an agreement, the acquisition is bound to fail.

What surprises me is how far the acquisition progressed. It seems like integration issues were not deeply considered before announcing the merger, and the companies were unpleasantly surprised by the culture clash once it came time to execute the deal.

It’s best to start thinking about and even planning for integration early in the acquisition process. This way you have plenty of time to invent creative solutions to address cultural differences or to realize it’s not a good match. Then you can walk away from the deal before moving too far down the path with a prospect that doesn’t interest you.

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