A proposed merger between two of the largest advertising companies in the world has been scrapped, a joint statement released by the firms has revealed.
The planned merger between Publicis and Omnicom would have created the largest advertising firm in the world if it had gone ahead, but the organisations have announced this has been pulled.
A slow pace of progress regarding the deal was cited as one of the top reasons for the deal being cancelled, while the companies noted there are challenges that "remained to be overcome" if an agreement is going to be made.
It is almost 12 months since negotiations between the two companies were launched, with Omnicom's chief executive John Wren pictured signing an initial agreement with Publicis with its chief executive Maurice Levy.
But a joint statement released by the firms this week has stated that the ongoing talks over a potential deal have created "a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders".
"We have thus jointly decided to proceed along our independent paths," they said. The two companies had previously noted that a deal between the two firms would save them around $500 million (£325 million) as a result of being able to pool their resources, while the new companies would also gain access to a wider range of clients.
However, some commentators had suggested a merger would be bad for the advertising industry as a whole, due to the fact the merged company would be so large, leaving rivals potentially unable to compete fairly when bidding for new business.
Following the announcement of the deal being broken off, the share price of Omnicom slipped by 2.72 per cent in after-hours trading on the New York Stock Exchange last night (May 8th). However, at 08:39 BST on the Paris Stock Exchange this morning, stocks in Publicis are currently trading 0.44 per cent higher compared to the start of the session.
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