Publicis CEO Arthur Sadoun shoots down suggestions about a large-scale acquisition

While Forrester analyst Jay Pattisall said on Tuesday (2 September) that Publicis Groupe could deliver a “knockout punch” to rivals by acquiring Dentsu’s international assets, it appears that the holdco’s global chief executive has a different strategy in mind to win the fight.

Speaking at a Bank of America investor conference in New York on Wednesday, Publicis CEO Arthur Sadoun seemed to dismiss suggestions that his company might be among the possible suitors for Dentsu, which has reportedly appointed two banks to explore potential sales for its international creative and media business.

"We are not interested in consolidating more of the same for the sake of efficiencies," Sadoun said, in response to a question about whether Publicis would pursue large-scale M&A activity, with the Omnicom-IPG merger likely to reshape the advertising landscape.

"This was true a year ago, it is even truer today,” Sadoun added, according to someone who attended the presentation. He said: “With the speed of change AI is bringing, we are only interested in buying capabilities in data, technology and AI that will enable us to continue to outperform the market and deliver immediate value to our clients. Our transformation allows us to deliver AI-powered marketing to our clients, and 100% of our investment is focused on accelerating even further in that direction."

Sadoun’s remarks prompted Nicolas Langlet, an analyst at investment bank BNP Exane, to state that the CEO's position “closes the door” to any potential interest in Dentsu by Publicis. “On the other hand”, he wrote, management would be looking for “accretive” M&A opportunities that allow it to “add differentiated capabilities and win market share”.

Pattisall had identified Publicis as one of several potential suitors for Dentsu, alongside Accenture Song, Havas, and private equity players. Acquiring Dentsu would result in Publicis eclipsing both Omnicom and WPP in scale, while also adding “creative firepower” and significant media presence, thanks to Dentsu’s extensive array of media networks, which control approximately $27bn in global billings for blue-chip clients including Procter & Gamble, General Motors, and Kraft Heinz.

Widespread industry speculation also led Dentsu CEO Hiroshi Igarashi to send a memo to employees stating that “no decisions have been made”, and that the company is looking to rebuild its business outside Japan “on our own”.

The analyst note also quoted Sadoun as citing the impending merger between Omnicom and IPG as good news for the sector, since it will reduce competitive pressure.

Bloomberg reported on Wednesday that Publicis shares rose to their highest level in nearly five weeks after Sadoun’s presentation, during which he expressed confidence about the holdco’s performance in the second half of the year.

Sadoun said that the company had had a “good summer” and any expected cuts in marketing spend did not materialise. He went on to express confidence that the company would achieve its target of 5% growth in organic revenue for 2025.

A version of this article first appeared on Campaign Canada