Publicis has been clear about its intention to expand its digital capabilities. Acquiring Sapient will allow Publicis to boost its digital revenue to more than 50% of its overall figure by 2015, three years ahead of its target.

So Publicis Groupe has offered US$3.7bn (AU$4.3bn) to buy Sapient, a deal that has been approved by the boards of both companies. The Groupe will pay US$25 per Sapient share, a 44% premium on the trading price on the final day of independent trading before the deal was announced on October 31.

A new umbrella company will be created, called Publicis. SapientNitro, Sapient Global Markets, Sapient Government Services, DigitasLBi, Razorfish Global and Rosetta. The agencies will continue to run independently.

Maurice Lévy, chairman and chief executive of Publicis Groupe, stated, “Sapient is a ‘crown jewel,’ a one of a kind company born in the technology space with strengths in marketing, communications, consulting and omni-channel commerce, all of which are equally important to best help clients achieve their digital transformation.

“It will also give Publicis Groupe access to new markets and creating new revenue streams. This acquisition fulfils many of Publicis Groupe’s objectives.”

Sales growth at Publicis has underperformed major rivals in the past quarters, which the company has blamed in large part on the distraction caused by merger efforts. Publicis also has faced revenue shortfalls at key digital agencies such as Razorfish, where some big clients cut back on spending and managers left.

“We will enhance our leadership position in digital, achieve our goal of deriving 50% of our revenues from digital and technology three years ahead of our 2018 plan, and leverage technology, consulting capabilities to expand in new verticals, and offering new and exciting opportunities to our talents,” Levy added.

Sapient has 13,000 people in 37 cities worldwide. It generated income of US$1.4 bn (AU$1.6bn) in revenue in the 12 months to 30 June 2014. Sapient currently posts double-digit sales growth, while Publicis has been experiencing low single-digit sales growth.

Alan Herrick, the chief executive and co-chairman of Sapient, will lead Publicis.Sapient as the chief executive. He will also join Publicis Groupe’s new senior management team, the Directoire+.

Advertising holding companies are facing increasing competition from technology and digital companies offering marketers new ways to target ads to consumers by using data and data-analytics tools. And it is having to fight for expertise with rivals such as Google Inc. and Facebook Inc. Publicis said that Sapient’s top 30 managers have agreed to stay at Publicis in “long-term commitments,” which will help it retain top managers once the deal is completed.

The deal is expected to close in the first quarter of 2015. It hinges on two requirements -Sapient shareholders must tender more than 50% of the group’s shares and the necessary regulatory approval must be obtained.