* Says yet to get approval for tax residency in the UK
* Failure to make merger tax-free for investors could break the deal - analyst
* U.S. revenue rises 4 pct at Omnicom, 5 pct at Interpublic
* Omnicom 1st-qtr revenue $3.50 bln vs est $3.48 bln
* Interpublic revenue $1.64 bln vs est $1.60 bln
(Adds details from conference call, analyst's comment)
April 22 (Reuters) - Omnicom Group Inc, the No. 1 U.S. advertising company, said it was unable to predict when its $35.1 billion merger with France's Publicis Groupe SA would close as the deal was yet to win some key approvals.
Omnicom's shares fell as much as 3.6 percent in early trade.
"At this point it's not practical to predict exactly when the transaction will close," Chief Executive John Wren said on Tuesday after the company reported better-than-expected quarterly revenue.
Omnicom, which in October expected the merger to close in early 2014, said in February that the deal was likely to close "a little bit into the third quarter".
The company said it was yet to receive approval from antitrust authorities in China and for establishing tax residency in the United Kingdom.
Wren said if the companies were unable to obtain the tax residency approvals, "it could affect the likelihood of satisfaction of the conditions to closing of our deal."
Any major tax implication for investors could be a potential deal breaker as both companies are trying to make the merger tax-free for their shareholders, Edward Jones analyst Robin Diedrich told Reuters.
"I think there's definitely some additional doubt cast on the deal getting done," she added.
The tax residency will have to be approved by the revenue and customs authority in the United Kingdom and the finance ministry of the Netherlands, where the new company will be headquartered.
Tax approval from France is also pending, the company said.
"With respect to a number of items (for receiving tax approvals)... there is no Plan B. Those things are requirements to get to a closing," Wren said.
Omnicom, which owns agencies such as BBDO Worldwide and Goodby, Silverstein & Partners, warned that it would need to withdraw and resubmit its filings if China's regulator was unable to resolve all questions by June 16.
HIGHER U.S. SPENDING
Omnicom and closest U.S. rival Interpublic Group of Cos reported better-than-expected revenue for the first quarter, mainly due to higher ad spending in their home market.
Revenue from the United States grew 4 percent for Omnicom and 5 percent for Interpublic.
Interpublic, which owns McCann Erickson and Draftfcb, reported a 7.7 percent rise in international revenue, as well as its first quarter of growth in Continental Europe in over two years. International revenue had declined in the prior three quarters.
"We saw solid contributions from across our agency portfolio, with strength in the U.S., as well as significant growth in Latin America and Asia," Interpublic Chief Executive Michael Roth said in a statement.
Omnicom's total revenue rose 3 percent to $3.50 billion, and reported net profit available for common shareholders of $201.4 million, or 77 cents per share.
Excluding merger expenses, the company earned 80 cents per share.
Analysts on average had expected earnings of 79 cents per share on revenue of $3.48 billion, according to Thomson Reuters I/B/E/S.
Interpublic's revenue rose 6.1 percent to $1.64 billion, beating the average analyst estimate of $1.60 billion.
Interpublic reported a smaller-than-expected loss attributable to common shareholders of $20.9 million, or 5 cents per share. Analysts had expected a loss of 8 cents per share.
Omnicom said organic growth increased revenue by 4.3 percent.
Interpublic reported a 6.6 percent rise in organic revenue and said it remained "well-positioned to meet or exceed" its 2014 target of 3 to 4 percent organic growth and operating margin of 10.3 percent or better.
Omnicom's shares were down 1.35 percent at $70.52 in afternoon trading on the New York Stock Exchange on Tuesday, while Interpublic's shares were up 4.2 percent at $17.57.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)