12:43 PM EST, 12/09/2024 (MT Newswires) -- Omnicom Group ( OMC ) agreed to acquire Interpublic Group of Cos ( IPG ). (IPG) in an all-stock deal to create a combined advertising company positioned for growth in the new era of marketing, the companies said in a joint Monday statement.

Investors of Interpublic will receive 0.344 shares of Omnicom ( OMC ) for each share owned. Omnicom's ( OMC ) stock dropped 8.2% in midday trading, while Interpublic's advanced 7.8%.

The deal, which requires clearance from regulators and approval from both companies' shareholders, is expected to complete in the second half of next year. Following completion, Omnicom's ( OMC ) stockholders will own 60.6% of the combined entity, while Interpublic's shareholders will hold the remaining 39.4% stake.

"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," Omnicom ( OMC ) Chief Executive John Wren said in the statement. "Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change."

The transaction is estimated to be accretive to both companies' adjusted earnings on a per-share basis and generate annual cost synergies of $750 million. Both companies plan to maintain their current quarterly dividends through the completion of the deal. The merged company had $25.6 billion in combined 2023 revenue.

The combined entity will retain the Omnicom ( OMC ) name and trade under the OMC ticker on the New York Stock Exchange, according to the companies. Wren and Omnicom ( OMC ) Chief Financial Officer Phil Angelastro will retain their respective roles, while Interpublic CEO Philippe Krakowsky and Daryl Simm will serve as co-Chief Operating Officers.

"We are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that's changing at speed," according to Krakowsky.

In October, Interpublic reported third-quarter adjusted earnings of $0.70 per share, unchanged from the year earlier, while revenue edged down to $2.63 billion from $2.68 billion. Omnicom ( OMC ) said in October adjusted EPS increased 5.7% annually to $2.03 for the September quarter, while revenue rose 8.5% to $3.88 billion.

Price: 95.09, Change: -8.33, Percent Change: -8.05