John Wren, the 72-year-old boss of advertising group Omnicom, whose profile is remarkably low in a sector famed for big egos and loud voices, has finally managed to nail the industry-defining deal he has been seeking for over a decade.

With the $13bn deal to acquire US rival Interpublic (IPG), announced on Monday in New York, Wren will hope that he has secured a future for the storied agency network amid the threat of irrelevance stemming from the large US tech companies.

He tried once before with a merger proposed in 2013 with Publicis, which collapsed into one of the largest M&A breakdowns in history. Since then its French rival’s revenues and growth prospects have accelerated, while advertising’s heartland on New York’s Madison Avenue has suffered from a rapid loss of value amid the rise of the West Coast tech sector. 

Now the deal with Interpublic marks a realigning of industry strength back to the traditional Mad Men of New York.

The combined group will leapfrog Publicis — as well as UK-based WPP — who have each previously competed for the global top spot with net revenues of about $15bn each. The global advertising group will have net revenue of more than $20bn and over 100,000 people.

News of the tie-up comes just days after a publicity stunt by Publicis declaring itself the largest agency by revenues in a PR campaign fronted by rapper and media personality Snoop Dogg.

“I think that will give John an enormous amount of satisfaction,” said one person close to Wren, who helped create Omnicom in the late 1980s, but this year admitted in an interview: “I’m not 30 any more. If I’m going to change the world, I’m going to have to do it quickly.”

Talking to the Financial Times on Monday, Wren said the two sides had been in talks for almost a year. “Its only going to be tried twice,” he added referring to his megamerger plans. “And both times by me. The lessons learnt a decade ago are not going to be repeated.”

One ally said: “John knows he is not getting younger and sees this as the chance for an industry-defining deal before he steps back.” An executive at a rival added: “John has always wanted to be the biggest.”

Wren said he was “not in the least interested in what people think my legacy is” but thought instead that the merits of the deal spoke for themselves. “Bringing us together is pretty extraordinary.”

Under the terms of the all-share deal he will become chief executive, with IPG’s CEO Philippe Krakowsky becoming co-president alongside Omnicom chief operating officer Daryl Simm.

However, advertising rivals question whether the deal has been struck from a position of strength with Sir Martin Sorrell, founder and executive chair of S4 Capital, calling it “a circling of wagons; two people huddling in the cold”.

“This is a reflection of the pressure on agency fees, people and margins together with the spectre of the impact of artificial intelligence and increased programmatic media planning and buying,” he said.

Industry gossip at the Cannes Lions advertising festival in June was all about consolidation, with IPG regarded as having been on the market for most of the year, according to three senior advertising executives, and both Publicis and private equity groups having looked at it.

But they said only Omnicom progressed with its interest in IPG, which earlier this year lost a key part of its lucrative Amazon work to its US rival as well as to WPP.

IPG’s Krakowsky told the FT that the board’s responsibility was to “assess strategic options” and that the deal with Omnicom was the “most compelling”.

European rivals — Publicis and WPP — will now be relegated to second and third place, prompting questions about whether or not they also need to bulk up or break up. Publicis has a market capitalisation of about €26.8bn while WPP’s is around £9.6bn.

Interpublic was worth $10.9bn at the end of trading on Friday while Omnicom was valued at $20.2bn. Their shares were up 8 per cent and down 8 per cent in New York trading on Monday, respectively.

WPP is seen to be a potential target for private equity groups, with complaints among investors that the group as a whole is valued at far less than its operational parts.

“If this deal goes through, it significantly increases pressure on WPP leadership and its board to take action,” said Christopher Vollmer, managing director at MediaLink and partner at UTA. “There’s growing potential for private equity to step in and push for a break-up of the company.”

The combination will also raise new questions over the long-term future of smaller advertising networks such as France’s Havas, which is expected to be listed on Euronext this month after a spin-off from the Vivendi conglomerate, and Japan’s Dentsu. Other executives say that there could also be a deal with S4 Capital, which fended off approaches from US rival Stagwell earlier this year.

But analysts argue that size is less important than capabilities. Both Interpublic and Omnicom are seen to have particular strengths — and so overlap — in the creative advertising agency sector.

They will own a number of separate advertising networks, from McCann, FCB and Mediabrands to BBDO and TBWA, which analysts expect will lead to a period of restructuring. Even in PR — a relatively small part of their businesses — agencies will include Weber Shandwick, Golin, FleishmanHillard and Portland.

French beauty group L’Oréal credits McCann, which is part of IPG, with the famous ‘Because you’re worth it’ tagline.

IPG has already streamlined its business — which some executives say was in preparation for a deal — by divesting smaller businesses.

However achieving promised synergies of $750mn would probably mean thousands of job cuts, executives said. “That’s not easy in a people business,” said one. “They are the two least tech-focused businesses so will also need to work on that area.”

Thomas Singlehurst, analyst at Citi, said in a note that the deal could deliver “significant cost efficiencies and benefits of scale, especially in media and technology” but “with the key challenge being potential revenue disynergy from any client conflict and protracted uncertainty for staff”.

Wren declined to comment on any specific plans to combine agency brands or lose jobs, but added: “We understand that each of our brands has a culture. I wouldn’t wait for the big announcements that we are going to bang together this group or that. We want the best talent to service the client.”

Analysts expect relatively few antitrust issues, especially under a more forgiving incoming US administration, although media agency work in the US may become a focus.

Rival advertising executives were on Monday sanguine about the prospect of a stronger US rival, with one pointing out that a “four to three” merger in effect took out one competitor and reduced pricing pressure.

Others said that scale did not necessarily make much of a difference when pitching for client work, warning that rival agencies would try to poach clients as the two combined and also try to focus more on their own tech and AI investments to find a competitive advantage.

Donna Sharp, managing director of MediaLink and UTA partner, said: “The thesis for this merger can’t just be scale: the market has already shown how it values scale alone . . . clients no longer see scale as a differentiator and sometimes see it as a hindrance.”

Wren said that it would be “shortsighted” for clients to move to rivals, adding that client conflicts are “not the same issue” as they were a few decades ago.

Advertising executives saw the irony of announcing the deal as a new report from WPP’s GroupM came out showing that the industry had rocketed to over $1tn in revenues — but also revealing that more than half of the value was now in the five large tech groups, who accounted for almost all of the growth.

The report underlined the need for consolidation in the traditional agency holding company model. Executives agree that the future will be about investing in AI and other technology that allows advertising to be done faster, cheaper and more effectively for clients. 

One area where scale will potentially make a difference is data and AI investment, with the combined group having increased firepower to invest resources in this area, according to analysts. 

Wren agreed it would mean more money to put into new technology, but he pointed to the tech already being deployed by the two groups. For example, Omnicom bought digital commerce business Flywheel from Ascential last year.

Publicis has fared better than its rivals having invested early in data-led services, including through the acquisitions of digital groups Sapient in 2015 and Epsilon in 2019 to bolster its technology platforms.

Vollmer said that “this big-bang consolidation play is an attempt to catch up to Publicis who threatens to break away from its peers in terms of capabilities and performance”.