Publicis Groupe SA (EPA: PUB) and Omnicom Group Inc. (NYSE: OMC) agreed to merge in an all-stock transaction to create the world’s largest advertising company with $23 billion in revenue, toppling market leader WPP plc.

Shareholders of Paris-based Publicis and New York-based Omnicom will each hold about 50 percent of the new entity, Publicis Omnicom Group. Publicis chief executive Maurice Levy and John Wren, his counterpart at Omnicom, will be co-CEOs as they unveiled the agreement at a press conference in Paris yesterday. Pending regulatory and stockholder approvals, the creation of an industry powerhouse with $35 billion in market value is expected to be completed by the first quarter of 2014.

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