Sir Martin Sorrell, chief executive of the advertising giant WPP, has labelled a proposed merger between rivals Publicis and Omnicom as "brave and surprising", and suggested the deal still faces significant barriers.

Speaking as WPP's shares rallied on the back of the merger, Sorrell suggested regulators and clients would have their say before his two rivals could unite to usurp WPP as the world's largest ad firm.

"In terms of size, at the end of the day, if you look at the geographies, it doesn't really create great scale except in the US and obviously the regulators are going to take a good hard look at that," he said.

Sorrell indicated that the proposed $35bn (£23bn) tie-up between US-based Omnicom and France's Publicis – which would see the second and third largest companies in the sector overtake WPP as market leader – would raise concerns among clients and shareholders.

"Clients really have not been taken through the pros and cons of this in any great detail and it's going to be very interesting to see what happens … If I were an Omnicom shareholder I would be extremely concerned about a merger of equals when the company I invest in has $14bn of revenue, while Publicis has only $8bn," Sorrell told CNBC.

WPP was one of the biggest risers on Monday morning, with shares up 2.1%. Analysts said the FTSE 100 company could benefit from a deal, billed as a merger of equals, attracting clients as the two firms focus on integration.

"Time will tell if the cultures will click and whether clients and talent benefit – and how $500m of synergies will be generated without job cuts. Co-CEOs is not an easy structure," Sorrell said.

"Having said all that I think it's a tremendous deal for Publicis. It's an extremely bold, brave and surprising move … but we'll have to see how this all plays out."

Under the terms of the proposed merger, Publicis's chief executive, Maurice Lévy, and Omnicom's boss, John Wren, would run the merged group together for the first two and a half years, after which Wren would take control.

A new holding company would be known as Publicis Omnicom Group, and have dual headquarters and listings in Paris and New York. It would be registered in the Netherlands, however, for reasons of "neutrality" rather than any tax advantage, according to Lévy.

Omnicom's most prized clients include PepsiCo and Apple, while Publicis handles marketing campaigns for Coca-Cola and Samsung, raising questions over whether clients would be happy to stay with a firm which represented its competition.