WPP stands to become the world's second largest advertising group after it won its takeover battle for Cordiant Communications.
WPP successfully fended off a potential rival bid from French advertising group Publicis and Cerberus Capital Management, a US investment fund with a large stake of Cordiant's senior debt. Cerberus had hoped to split Cordiant's assets with Publicis.
Cordiant's shareholders will only receive one new WPP share for every 205 Cordiant shares, valuing Cordiant's share capital at £10 million. WPP has bought the majority of Cordiant's £256 million debt from all bar one of its lenders.
Sir Martin Sorrell, WPP's Group CEO, said: "The acquisition of Cordiant will make an important contribution to our long-term strategic goals - particularly in marketing services and expansion in Asia."
WPP has a market capitalisation of £5.7 billion, and its advertising agencies include J Walter Thompson and Ogilvy and Mather.
The takeover is subject to Cordiant's shareholders approving a court scheme of arrangement. If it is approved, Cordiant's shares will be cancelled on 16 July.
WPP will finance the acquisition with a placing of £100 million of new shares. The issue is not subject to the Cordiant deal being completed.