Global marketing and corporate communications holding company Omnicom is reportedly in advanced discussions to acquire Interpublic, a major rival, with an announcement possible this week, marking a significant shift in the global landscape of agency services.

Industry speculation had also put Accenture in the frame for an Interpublic group acquisition in recent months but according to The Wall Street Journal on Sunday, the proposed merger would create the world's largest agency services company, with a reported revenue of $24 billion, or a net revenue of around $22 billion after excluding undisclosed media costs at Omnicom. The move could lead to efficiencies in real estate costs, back-office costs, leadership team costs, and other areas.

A larger scale could better position the agency group to invest in people, partnerships, and technology capabilities in a world where AI and scaled investments are required to best service large brands. The merger could also improve competitive dynamics in favour of all agencies when large clients seek to play agencies against each other to drive down pricing for services.

However, potential downsides include 'dis-synergies' due to corporate politics and cultural challenges, and disruption to the agencies and their clients during the simplification process. The merger could also prompt other holding companies to pursue scaled combinations. Antitrust issues are not expected to be significant, as they were not in 2013 when Publicis and Omnicom attempted to combine.

In the US, a combined Omnicom-Interpublic would have around $12 billion in net revenue, or around 13% of all US agency services revenues. A combined entity would likely become the #1 agency group in the UK and the rest of Europe, although WPP would remain the largest agency group in APAC and Latin America.