John Wren, CEO of Omnicom, has sworn never again to attempt a merger of equal partners in the wake of the collapsed deal with Publicis. As the wisdom of M&A specialists would say: “there is not such a thing as a merger, only a takeover.”
Since he took over the dashboard of Omnicom in the late ‘90’s Wren (left) has been used to being an acquirer and has been perhaps a little distanced from the downstream machinations of mergers. The rumours about who was supposed to do what job at the merged Omnicom/Publicis were, perhaps, par for the course.
Our agency, Simons Palmer, was one of the first acquisitions under John’s leadership shortly after he became CEO when we ‘merged’ with TBWA. That quickly drifted towards messy conversations in London and New York on many and various issues. The main problem was poor communication, or perhaps people dodging the difficult conversations.
What became clear early on, before anything was announced, was confusion and double-speak. For example, Alistair Richie, who was then President of TBWA Europe, allowed the TBWA folk in London to believe we had been acquired and the TBWA management would be in charge; the exact opposite of what had been agreed in the negotiations. This caused no end of people problems before we could get our heads around what to do first.
My heart sank when I had a call from Jonathan Hoare, MD at TBWA at the time, to tell me the whole agency had walked out to join Trevor Beattie (left) in the local pub because he had resigned with immediate effect. This was a Monday so I knew it would be all over the trade press that week; and it was a perfectly engineered PR torpedo.
The obvious problem with a merger is the duplication of jobs. Trevor understandably wanted to be the sole creative director but that simply wasn’t sensible initially as we had a whole raft of clients to keep stable and couldn’t rock the boat with significant changes. The same issues applied in several areas and needed to be resolved as fast as possible.
The whole process is like a pressure cooker with lawyers and long protracted meetings debating detail alongside the attempt to sustain ‘business as usual,’ internally and externally. So inevitably there are huge time constraints on big decisions. This is obviously what was going on with Omnicom and Publicis on a global scale.
Another piece of M&A advice is never be afraid of walking away from a deal. Once in the hurly-burly of trying to complete a deal there can be an erosion of points of principle which can lead to dissatisfaction for both parties.
My advice to anyone considering entering a trade sale is: write down the key issues at the outset, review them as the process takes hold, stick to them throughout and be prepared to walk away even when the other party is waving a large cheque in your face.
My guess is the decision to park the Omnicom/Publicis merger is probably the right one for both parties as the potential for mayhem down the line (tax issues, client issues, management issues, shareholder issues, etc), was too great to pursue the idea.