The Interpublic Group of Companies (IPG) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a premier marketing and sales company with highly complementary assets, platforms, and talent, expanding client opportunities and delivering exceptional growth and long-term value for shareholders.

• The combination is driven by the need to accelerate innovation, leverage data and AI, and provide a comprehensive portfolio of marketing and sales services globally.

• Both organizations share similar cultures and core values, facilitating integration and collaboration.

• The merger creates an industry-leading identity solution with comprehensive consumer behavior insights, enhancing client outcomes at scale and speed.

• Significant free cash flow increases capacity for internal investments and future acquisitions.

Financial terms and conditions

• The transaction is a stock-for-stock merger; Interpublic shareholders receive 0.344 Omnicom shares per Interpublic share, with Omnicom and Interpublic shareholders owning 60.6% and 39.4% of the combined entity, respectively.

• The combined company will have a pro forma equity market capitalization of approximately $31 billion as of December 6, 2024.

• Combined 2023 revenue is $25.6 billion, with adjusted EBITA of $3.9 billion and free cash flow of $3.3 billion.

• The deal is expected to be accretive to adjusted earnings per share for both sets of shareholders in the first 12 months.

• The transaction is expected to be tax-free for both sets of shareholders.

Synergies and expected cost savings

• $750 million in annual cost synergies are expected, with the majority achievable within 24 months and full realization within 36 months post-closing.

• Synergies will come from streamlining the organization, aligning complementary businesses, automation, offshoring, and eliminating duplicative vendor spend.

• Approximately $450 million in one-time cash costs are expected to achieve these synergies.