For Dentsu, the deal enables it to find new growth outside its home market, which is eroding. Though the company dominates traditional Japanese print and broadcasting sectors, overall ad industry revenue fell 2.3 percent to 5.7 trillion yen ($72 billion) in 2011 -- the fourth annual contraction for an industry that in the past decade has shrunk by almost 6 percent.
"Dentsu and Aegis will be the market leader in the Asia-Pacific region, enjoying a strong presence across Europe and the fastest growing agency network in the US," President and CEO of Dentsu, Tadashi Ishii, said.
"In recent years, under the leadership of Jerry Buhlmann and his team, Aegis has been recognized as the most successful independent media and digital communications agency with strong performance momentum and talented, client-focused employees."
Dentsu said it had already purchased or had irrevocable undertakings in relation to around 30 percent of Aegis' stock, including shares from Bollore.
The Bollore group confirmed it had agreed to sell its 26.4 percent stake to Dentsu for 240 pence a share in a big payout for the group after it bought into Aegis in 2005.
Bollore will now have more capital to invest elsewhere, perhaps in his electric car battery project or in media-to-telecom group Vivendi where he is poised to take a 5 percent stake.
The deal comes months after Dentsu ended a nine-year alliance with Aegis' European rival Publicis. The French company bought back a 9.1 percent stake held by Dentsu in February, leaving the Japanese group with the firepower to strike another deal in Europe, analysts said at the time.
"We at Aegis are delighted at the prospect of being able to play a full part in helping Dentsu create a platform for global growth and continued digital innovation," Buhlmann said.
"By forming the first communications group with true global reach, the growth strategies of both businesses will be enhanced as we provide more scale, geography, capability and investment to support clients."
Morgan Stanley advised Dentsu on the deal, while Greenhill and J.P. Morgan Cazenove advised Aegis.
($1 = 0.6426 British pounds)
(Additional reporting by Timothy Kelly and Junko Fujita in Japan and Leila Abboud in France; Editing by Sophie Walker)
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