Publicis-Omnicom: Small Banks Rothschild, Moelis Win

In dealmaking circles, the merger that will create the world’s biggest advertising firm is notable for what it lacks: the participation of a single large investment bank. To sort out the details of their proposed union, Omnicom Group worked with Moelis, a New York-based boutique bank, while Publicis Groupe retained the services of Rothschild, the storied Paris-based merger adviser. The two will split as much as $70 million in fees, according to researcher Freeman & Co.—a big check for firms of their size. They’ll also get a bump in the widely scrutinized investment banking industry league tables.

The structure of the Publicis-Omnicom merger—a stock-based transaction without a big financing component—made it boutique-friendly, says Jeff Davis, a managing director at consulting firm Mercer Capital. “The reason we didn’t add more advisers is because we didn’t need them,” Omnicom Chief Executive Officer John Wren said at a July 28 press conference in Paris. “Maurice and I settled many of the issues,” he added, referring to Publicis CEO Maurice Lévy. Structured as a merger of equals, the combination didn’t require the issuance of debt or new equity, which meant there was no need for large banks’ financial muscle or their relationships with institutional investors. Lévy also credited Moelis and Rothschild for keeping news of the deal from leaking until July 26, when Bloomberg News reported the discussions.