Will the Vivendi/Havas deal encourage more mega-mergers?

Will the Vivendi/Havas deal encourage more mega-mergers?

Or could the consulting and IT giants be doing most of the buying in marketing?

When Havas announced that Vivendi was to buy 60% of its stock from Bolloré Group, not many people were surprised. Bolloré Group already controlled both companies – its chairman and chief executive, Vincent Bolloré, is also chairman of Vivendi, while his son Yannick is chairman and chief executive of Havas. 

How different the response was from Omnicom and Publicis Groupe’s doomed merger plans in 2013, which rocked the industry and dominated the financial press for days. Yet that was a bombastic deal that had been all but agreed without a whisper of gossip in the private members’ clubs of Paris and New York. It was also the potential combination of two very different companies – businesses with incompatible "corporate cultures", as it turned out. 

Obviously, the official rationale for the Havas/ Vivendi deal fails to acknowledge familial control or personal ambition. Instead, it is that the two companies share complementary services. Havas says it will be able to lean on the Canal+ and Universal Music Group owner’s experience in talent management, content creation and distribution, while Vivendi will be able to access Havas’ expertise in consumer science, data analytics and new creative formats.

But far from being a sign of media owner and agency consolidation becoming the norm, analysts expect the group to be an outlier. They believe the biggest deals are more likely to come from consultants entering the fray more seriously. Ben Tolley, a partner at Clarity, which advised independent Australian creative agency The Monkeys on its recent sale to Accenture, predicts that a consulting or IT giant will buy one of the "big six" advertising groups "within the next five years".

That’s not to say there is no appetite for mergers and acquisitions in the marketing world. Research from Clarity and JEGI found that the "big six" were responsible for 103 deals last year – although that was down from 116 in 2015. Ian Whittaker, head of European media research at Liberum, thinks the "most logical next step" for Havas/Vivendi would be to buy Publicis Groupe: "There’s not a huge overlap between Havas and Publicis, and it would give more scale to compete with Omnicom and WPP."

If the Havas/Vivendi deal does start a trend, smaller groups are ready to take advantage. "We’d be happy to see some mega-mergers as it would further highlight the benefits of us as a distinctive independent group," David Kershaw, chief executive of M&C Saatchi, says. 


 David Kershaw - Chief executive, M&C Saatchi

"I can’t see many more mega-mergers on the horizon. If they are going to happen, they’re likely to come from the consultants and accountants. Within the industry, with the exception of media buying, there are no economies of scale but lots of problems."


 Douglas McCabe - Chief executive, Enders Analysis

"This is a critical space to watch. Convergence between media, networks and marketing is the
theme. We will see more investment by telecoms companies into content and advertising without necessarily triggering a series of mega-mergers."


 Lorna Tilbian - Executive director and head of media, Numis Securities

"Unlike when Omnicom/Publicis Groupe happened, which made people step back and think ‘What’s the next move on the chessboard?’, this is the least surprising deal I’ve ever seen. I don’t think it will start a stampede; it’s very much a family move."


 Ian Whittaker - Head of European media research, Liberum

"Vincent Bolloré had a majority holding in Havas and is the largest shareholder in Vivendi. There was a feeling that Bolloré would look to merge the stock. The question is: does Bolloré stop at this or look to buy other agency assets?"

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