Publicis Groupe, the fourth-largest agency holding company, will acquire Digitas for $1.3 billion, Publicis said in a statement.
Paris-based Publicis will pay Digitas shareholders $13.50 for each share. Both boards have unanimously approved the offer, the statement said.
Earlier this year, Publicis CEO Maurice Levy said he was looking to do an acquisition. Since then, much industry speculation has focused on Digitas, whose digital capabilities are much in demand. Publicis and Digitas also both have major client relationships with General Motors Corp.
The deal is the industry's biggest since WPP Group bought Grey Global Group for about $1.75 billion in 2005.