Omnicom shells out $196m on severance ahead of IPG Mediabrands acquisition
John Wren
Omnicom Group has spent almost A$200 million on severance costs this year as it prepares to close its landmark acquisition of IPG Mediabrands.
The global holding company reported A$196 million (US$127 million) in “repositioning” costs for the nine months to 30 September, primarily tied to “severance actions” ahead of the deal’s completion.
The total also includes “efficiency initiatives” undertaken during the second quarter of 2025, as Omnicom moves to finalise the acquisition by the end of November.
For comparison, the corresponding period in the previous year’s “repositioning costs” totalled approximately A$89 million.
Within Omnicom Group’s third quarterly earnings, an operating expense of A$59.4 million was allocated to severance as Omnicom “prepare[s] to integrate the pending acquisition of IPG”.
The EU’s competition authority, the European Commission, is the last regulatory body to review Omnicom’s acquisition of IPG Mediabrands, marking the final hurdle before the deal can be fully completed.
Omnicom chairman and CEO John Wren said in a statement that the acquisition would create “the world’s leading marketing and sales company”.
“Together, we will emerge with the industry’s most talented team and a powerful platform designed to accelerate growth through strategic advantages in data, media, creativity, production, and technology,” he continued.
“We’re already seeing strong momentum with significant new business wins across both companies, underscoring the compelling opportunities this acquisition creates. Our enhanced ability to deliver revenue growth, operate with greater efficiency, and generate healthy free cash flow only strengthens our confidence in the future – for our clients, our people and for long-term shareholder value.”
On the performance side, Omnicom Group posted a 3.7% fall in organic growth for the Asia Pacific region, a blip on an otherwise positive global trajectory for the holding company’s third quarter.
The group posted quarterly revenue of A$6.1 billion, fueled by organic growth of 2.6% globally, coming off the back of recent postings of 5.7% organic growth from Publicis and 3.8% organic growth at Havas.
The holdco’s Media & Advertising posted a rosy picture of 9.1% organic growth.
According to consulting firm Madison & Wall, much of the gains were driven by the rapid expansion of third-party service costs, primarily expenses tied to principal-based trading. The firm noted that “modestly improved company-wide margins during the quarter suggest the increase in principal-based activity did not have a meaningful effect on overall profitability.”
Across the wider business, Omnicom posted organic growth of 2.0% in Execution & Support and 0.8% in Precision Marketing.
However, it also saw declines of -7.5% in Public Relations, -17.7% in Experiential and -16.9% in Branding & Retail Commerce.
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