Omnicom has struck a deal to merge with Interpublic Group, bringing together marketing and sales firms that generated a combined $3.7 billion in pharmaceuticals and healthcare revenues over the first three quarters of 2024.
Interpublic is the junior partner in the merger, with its shareholders set to own 39.4% of the combined business. The company is home to IPG Health, a collective of 45 agencies that have worked with pharma players such as Pfizer and Boehringer Ingelheim. Bringing those agencies into a business that already has Omnicom Health Group will create the world’s largest advertising agency.
Pharmaceuticals and healthcare has been the biggest area for both companies over the first nine months of 2024. Omnicom generated $1.8 billion from the industry, out of $11.4 billion overall. The industry is even more important to Interpublic, which named pharmaceuticals and healthcare as the source of $1.8 billion of the $7.8 billion in sales it reported across the first three quarters of the year.
At almost $3.7 billion, pharmaceuticals and healthcare revenues accounted for 19% of total sales across the two businesses. Food and beverage, on 12%, is the next biggest industry for the combined company.
Omnicom pitched the merger as a deal that will “bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform.” The combined company will employ more than 100,000 people and is aiming to generate $750 million in cost savings, largely within the first two years.
Details of how Omnicom plans to realize the savings are yet to emerge but earlier agency mergers have led to the consolidation of brands. WPP’s decision to combine Wunderman Thompson and VMLY&R, which were themselves the products of mergers, shows one potential future for the brands affected by the merger of Omnicom and Interpublic.
The news comes days after Publicis enlisted rapper Snoop Dogg to tell the world that it had become the world’s biggest holding company. Omnicom’s merger with Interpublic would knock Publicis back into second place.