Tomahawk, WI 7/31/2013 (Basicsmedia) – Periodically, companies have to consider whether they will remain as single entities or merge with another business so as to enjoy a much improved performance in the market. When this scenario emerges, any investor worth his/her money will want to know how this will affect their investments. Therefore, this article is written with the intention of helping investors to understand what the future holds for them now that it is being reported that Omnicom Group Inc. (NYSE:OMC) is on the process of negotiating with Publicis as to whether the two companies can create a merger between themselves.

OMC simply stands for Omnicom Group Inc, and has been around since 1944 when it was founded. It has New York, New York as its base or headquarters. The company is located in all the major continents starting from North and South America, Africa, Europe, Middle East and Asia, around the Pacific Ocean. Anyone in need of corporate communications, advertising, and marketing services in these regions, would be served in the best manner by OMC. The company is quite serious about what it provides its customers with and to this end, has employed more than 71k personnel to provide high quality services.

How Jittery is OMC’s Stock? What Has Caused This?

Recently, OMC declared a dividend per share of $0.40 which has to be said is the highest in the last 16 years. This is quite good indicator which helps investors to understand that the company is not performing half as badly as others might want you to believe. If you were to take a look at OMC’s latest prices from NYSE, you would notice that there has been a major increase in the volume of trade, from where it left off on July 26, 2013. As at the end of Friday last week, it had traded around 1.63m shares, while on Monday, this figure had shot up to around 17.63m. What does this indicate?

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This diagram, which is courtesy of http://finance.yahoo.com/q/bc?s=OMC+Basic+Chart, shows a huge improvement in OMC’s stock price in the last one year.

I’m of the opinion that the huge increase in OMC’s volume of trade in NYSE is probably because of the news that it intends to merge with Publicis. When you consider that it opened on a high of $70.04 and closed at $64.75 on Monday this week, compared to $64.08 and $65.11 respectively at the close of business on Friday, this provides further proof that something probably has happened between last week and this week to affect the price. And this is where I believe that the news regarding its merger with Publicis has played a major role in affecting the stock price.

Why Is OMC Merging with Publicis?

OMC competes with IPG (Interpublic Group of Companies), PUBGY (Publicis Group of SA), and WPPGY (WPP PLC). It’s worth noting that it intends to merge with one of its major competitors in the advertising agencies industry, Publicis. In terms of market capitalization, it is slightly ahead of PUBGY, but still ranked behind WPPGY. Moreover, one also needs to remember that WPPGY has more employees compared to OMC. When talking about revenues, OMC falls behind WPPGY, but ahead of IPG and PUBGY. Its net income is third behind that of WPPGY and PUBGY respectively.

It’s my belief that OMC is in a good position financially, owing to the confidence investors have continued to show in its shares. The generally positive and upward trend observed in its stock price, is a clear indication that investors still continue to pour their money in the company, and trade in its shares. If you are willing to invest in OMC, I would advise you to go ahead since I believe that if it successfully merges with Publicis, this could be of great benefit to you in the long run because there is a possibility that the new firm could actually end up being the top dog in this industry.

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