'Big six' acquisitions set to sag to half the level of 2018

Dentsu leads much-diminished deal-making activity by volume.

Epsilon: CEO Bryan Kennedy and Publicis' Arthur Sadoun
Epsilon: CEO Bryan Kennedy and Publicis' Arthur Sadoun

The "big six" holding companies are on course to acquire fewer than half the number of agencies they bought last year, according to the latest mergers and acquisitions data from Results International.

WPP, Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas have between them acquired 23 companies three quarters into 2019, well below the 71 they notched up in 2018.

Accenture, on the other hand, is maintaining its momentum with a total of seven acquisitions so far, not far off the nine it made in 2018.

The collapse in big six deal-making came despite an overall 16% year-on-year rise in marketing sector M&A for the first three quarters of the year, up to 1,057 deals. Adtech and martech accounted for that growth, while marketing services deals were flat, Results International noted.

Paul Georges-Picot, director of Results International, suggested WPP’s restraint amid "its ongoing group restructuring" as one reason for the decline in big six M&A deals.

Dentsu has been the most active of the big six so far this year, as it was last year, when it swooped on 31 targets.

Four deals in the third quarter – Davanti Consulting, Ambiant, Ugam Interactive and MuteSix – brought Dentsu’s 2019 haul up to 10.

Publicis (which made its biggest-ever acquisition in the form of Epsilon for $3.95bn in the second quarter) and Havas have each made five. WPP has made two, Omnicom (which typically favours organic growth) one, and Interpublic zero.

George-Picot highlighted Epsilon, together with previous-year acquisitions Sapient (also Publicis) and Acxiom (Interpublic), saying: "M&A is still very much on the agenda for the holdcos, but the focus has shifted to future-proofing their technology offer."

However, the long-term trend for big six deal-making volume has been downwards every year since at least 2014, when they made a total of 132 acquisitions.

Results International noted that the advertising and creative agencies sector was the one throwing up the highest number of deals in the third quarter. Roughly half of those deals were in the full-service and user experience/user interface design sectors.