The Australian Competition and Consumer Commission (ACCC) will not oppose Omnicom Group Inc’s proposed acquisition of The Interpublic Group of Companies Inc, saying the deal is unlikely to substantially lessen competition in Australia for media buying and marketing and communications services.
Omnicom and Interpublic are both major global holding companies in advertising, media and communications. In Australia, Omnicom’s key brands include DDB, TBWA, OMD Worldwide, PHD Media, Clemenger Group and Hearts & Science. Interpublic’s local brands include IPG Mediabrands, Universal McCann (UM), Initiative, 303 MullenLowe and Octagon.
“Our investigation found that while the proposed acquisition would result in an increase in the parties’ combined market share, other suppliers of media buying and marketing and communications services would continue to effectively compete with Omnicom after the acquisition,” ACCC Commissioner Dr Philip Williams said.
The regulator said remaining global conglomerates such as WPP, Publicis and Dentsu would continue to provide strong rivalry to the merged group, alongside a number of smaller independent agencies and specialist providers.
In reaching its view the ACCC applied the legal test in section 50 of the Competition and Consumer Act, which prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market.
The ACCC also noted a potential conflict of interest: Universal McCann, part of the Interpublic Group, is the exclusive provider of media buying services for all Australian Government departments, including the ACCC itself. That contractual relationship is managed by the Department of Finance.
Both Omnicom Group Inc. and The Interpublic Group of Companies, Inc are US-based holding companies listed on the New York Stock Exchange. Media buying covers planning and purchasing advertising space across television, radio, print, outdoor and digital platforms, while marketing and communications services encompass creative development, public relations, consumer insights, direct marketing, events and related services.
