Namnews: The unintended impact of mega-mergers

Published: 4-Jun-2014

With the rising trend for companies to combine forces to optimize scale, reduce tax and drive the output of complementary R&D resources, Brian Moore looks at the impact on C&T suppliers

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The key issues with mega-mergers, apart from economic, have to be both the impact on trading partners and the political implications for all stakeholders. Despite meticulous planning, it is inevitable in most cases that the merger process will be delayed due to competition legislation and while the authorities explore the potential impact on markets.

In fact, in the Publicis-Omnicom merger, first announced last July, the pace of progress was so slow due to regulatory issues that there was a reported loss of more than $1.5 billion of client work and, according to a joint statement from the advertising agencies, “a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders.” As a result, the companies called off the merger deal early in May. 

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