The WPP empire

Ogilvy & Mather Worldwide J. Walter Thompson Company Y&R Advertising Hill and Knowlton Burson Marsteller Ogilvy Public Relations Worldwide Cohn and Wolfe impiric (formerly Wunderman Cato Johnson) OgilvyOne MindShare Media Edge CommonHealth Sudler & Hennessey Millward Brown Research International Kantar Media Research Enterprise IG Landor Associates Revenues: $5.2bn (1999 pro forma)

WPP shareholders will own two-thirds of the combined group.

The agreement will marry the two companies' advertising, public relations and direct marketing interests.

WPP chief executive Martin Sorrell said: "This transaction creates a worldwide leader. The two organisations are highly compatible. We share a common philosophy and culture."

The new group hopes to make cost savings of WPP at least $30m during the first year.

White knight fails to ride

Young & Rubicam was one of the last few remaining independent agencies.

The WPP take-over deal nearly fell apart earlier this month when both firms argued over 'golden parachute' pay-offs for Young & Rubicam executives and the degree of autonomy the US firm would enjoy.

French competitor Publicis appeared ready to act as a "white knight" and save Young & Rubicam from WPP, but pulled out on Monday. The firm said it would not submit a bid after all.

WPP said that a group of Young & Rubicam's senior executives had agreed to stay with the group, signing new employment contracts and agreeing not to sell two-thirds of their shares for one year.

Shareholder approval

Young & Rubicam still needs to gain approval for the deal from major shareholders and clients which include some of the world's biggest accounts.

WPP is offering 0.835 of its American Depository Receipts - WPP shares traded on US stock markets - for one Young & Rubicam share.

Publicis declines bid

That led to talks between France's Publicis and Young & Rubicam, but Publicis said on Monday it for the US firm.

Young & Rubicam has reportedly dropped its demand for full autonomy by having its chief financial officer Michael Dolan running Young & Rubicam in the first year of the takeover before WPP took over the reins.

Another key sticking point in the negotiations was Young & Rubicam's "golden parachutes"