NEWS7 October 2013

Publicis/Omnicom merger pushes 2013 M&A deal value above 2012’s total – JEGI


US — Mergers and acquisitions in the media, information, marketing and related technology sectors during the first three quarters of 2013 saw 1,057 transactions announced at a total value of $67.5 billion, according to investment bank The Jordan Edmiston Group (JEGI).


“The $21.9 billion Publicis/Omnicom merger drove total deal value up, but without that blockbuster announcement, 2013 YTD deal value decreased 23% on roughly the same volume of transactions as the prior year.  Smaller deals by strategic company acquirers dominated, with 93% of transactions under $100 million in value.”

Here’s JEGI’s predictions for the year ahead:

  • Expect the M&A market to continue to be dominated by small strategic transactions, due to the uncertain environment in the US caused by political gridlock, a sluggish economy, and the implementation of Obamacare and numerous other government regulations.
  • Larger transactions will likely focus on aggregation and consolidation among mature or legacy companies (for example, Publicis/Omnicom; Nielsen/Arbitron; Gannett/Belo; Dentsu/Aegis), due to the low-growth economy, coupled with rapid technological changes, with most management teams and boards of directors somewhat reluctant to pursue significant transformative deals.
  • Technology will continue to challenge existing company models.  For instance, consider how Angie’s List and Yelp are affecting the yellow pages industry; how LinkedIn is challenging traditional job boards; and how proliferating internet news sources are strongly competing against the traditional news industry.
  • Additionally, marketing automation will accelerate and continue to remake the marketing services landscape. This leads us to wonder which company will be the global advertising and marketing agency of the future – WPP, Publicis/Omnicom, Dentsu?  Or, Accenture, Adobe, IBM? It will be interesting to see how the marketing and technology companies continue to intersect going forward.

Read the full report here.