France's finance minister Pierre Moscovici told French radio that the government said "non" to the initial plan for Publicis Omnicom Group to locate its headquarters in New York.
The sensitive French feared losing Paris as headquarters for a national champion to the rough and tumble Big Apple. That loss would be a humiliating blow to France's identity. Closer-to-home Holland became the compromise solution. The practical Dutch do not represent a challenge to the super-sophisticated French.
Publicis Omnicom, which vows to achieve $500M in cost-savings, will be saddled with two operational headquarters, along with the corporate outpost in the Netherlands. That doesn’t sound very efficient, especially when pink slips start flowing to staffers as creative types get axed in favor of data people as the mega-agency launches its quest to become more Google-like.
John Wren, whose Omnicom firm generated $4B more 2012 revenues than Maurice Levy's Publicis Groupe did, had to travel to Paris to announce the deal. That was either a snub to the media capital of the world (Wren isn’t exactly a media hound) or a genuflection to the embattled government of Francois Hollande.
President Hollande is in the midst of a national PR campaign to "jolt the confidence" of his pessimistic countrymen who struggling with an 11 percent unemployment rate. [I spent a week in Paris earlier this month. The French media were fixated on France's national decline vis-à-vis one-time economic equal, Germany.]
Publicis has about 5,100 of its 58K member workforce in France. How far will France’s government go to protect those workers? Will that interference crimp growth elsewhere?
Moscovici promised that he would be "vigilant" to make sure that the Publicis/Omnicom marriage meets certain post-merger conditions. That’s certainly a warning shot.
One small victory for Wren: France has apparently agreed that the "e" can be dropped from "Groupe." Of course, that concession goes into effect only if the merger is approved.