Publicis’ Michael Rebelo: Classic agency M&A no longer a priority
Publicis Group's Michael Rebelo and Atomic 212's Rory Heffernan
Publicis Group is shifting away from acquiring traditional creative and media agencies in Australia, pointing to a shrinking market and a broader slowdown in holding company dealmaking.
Speaking on the Mumbrellacast, Publicis Group ANZ CEO Michael Rebelo said the network had fielded approaches from independent agencies, but was no longer prioritising classic agency acquisitions.
“We’ve had a number of independent agencies calling to see if we had an appetite,” he said. “But right now we are looking for different things.”
The comments come a year after Publicis Group ANZ completed its landmark acquisition of Atomic 212, a deal Mumbrella’s Tim Burrowes at the time suggested could be one of the last major agency transactions of its kind.
According to Rebelo, the Atomic 212 acquisition was a “growth acquisition”, not “a cost or synergies acquisition. We wanted to make sure Atomic could sit, be preserved, and thrive within the group.”
However, broader pressures across the industry, including slowing growth in marketing investment, have since shifted priorities.
“I think the industry is getting smaller. Investment in marketing and advertising is not growing as fast as it should be,” he said.
Instead, holding companies are increasingly turning inward, reassessing their structures and priorities.
“A lot of organisations are now looking fundamentally at themselves; what is their strategy, what is their reason for being, what is their network or portfolio of brands, how are they organised, what is their go-to-market, and how do they look for greater synergies and efficiencies,” he said.
While acquisitions are not off the table for Publicis, especially for digital or technology organisations, Rebelo said appetite across the sector has cooled.
“I think there is less of an appetite today in the landscape. The classic holding company appetite has diminished for sure,” he said.
“That’s not to say acquisitions are off the table, but what we’re seeing is a trend of consolidation of brands, divestment of brands, and merging into practices and platforms. The traditional holding company landscape … those days of M&A are certainly becoming more limited.”
A tested formula
Rebelo, who has overseen seven acquisitions during his time in the role, said the integration of Atomic 212 had been a “pleasant surprise”.
“We wanted to make sure that [Atomic 212] could sit, be preserved and thrive within the group,” he said.
Atomic 212 CEO Rory Heffernan — also interviewed on the Mumbrellacast — said the agency had retained its culture while benefiting from the scale and capability of the wider Publicis Group network.
“Atomic was performing so well in the market for so long that I wasn’t going to mess with the formula, and [Rebelo] certainly held true to that,” Heffernan said.
“From a culture perspective, we hold a lot of things very dear to us,” he said.
“We’ve built a lot of new tech and capability this year, and that also drives culture. We’ve adopted a lot of group initiatives like Marcel, which is an amazing platform for collaboration and growth.”
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