Michael Kassan Sees More Holdco M&A in the Next Year

Michael Kassan, one of many media and advertising and marketing trade’s most influential dealmakers and the pinnacle of advisory agency 3C Ventures, anticipates one other company holdco mega-merger on the close to horizon. “I don’t suppose they’ll proceed with out some consolidation,” Kassan speculated of the holdcos in an interview with ADWEEK at Kassan’s 3CV Plage at Cannes. “In case your query is, Michael, ‘If we’re sitting right here subsequent yr, suppose there’ll be one other one?’…I feel so.”The prediction comes as Omnicom’s deliberate acquisition of IPG—a $13.25 billion deal set to shut within the second half of this yr—faces growing scrutiny. The U.Ok.’s competitors watchdog has launched a probe into the transaction, whereas the U.S. Federal Commerce Fee has issued a second request for data. Kassan, for his half, believes that the Omnicom-IPG deal will undergo. “It’s a deal that ought to shut. There’s not an antitrust situation right here,” he mentioned. “Hopefully it doesn’t get political.”Outdoors of Omnicom and IPG, the most important company holding corporations and networks embrace Publicis, WPP, Dentsu, S4, Havas, and Stagwell. Kassan’s high-level analysis: all of the holdcos are feeling the strain. A part of that is because of strain to ship good margins, he mentioned. Whereas companies have developed their income fashions, transferring past a fundamental price construction and embracing streams like principal-based media shopping for (the place the company buys media and sells it to the shopper at the next fee), they’re combatting margin pressures. “Consolidation goes to make sense,” he mentioned. “Again workplace, the commercial logic of consolidation is extra acceptable now than it’s been in a very long time, as a result of marginal strain is actual.”And whereas inner consolidation on the holdcos has accelerated—WPP, as an example, introduced collectively VML and Y&R with Wunderman Thomson underneath the VML model, whereas IPG married FCB Well being and McCann Well being into the unified IPG Well being model—this type of trimming received’t be sufficient, Kassan mentioned. “It’s going to get powerful,” he mentioned. “There’s extra to come back there.”