WPP Group Agrees to Buy Young & Rubicam

Britain’s WPP Group reached an agreement in principle to buy Young & Rubicam Inc. in a stock deal worth about $4.7 billion that would make WPP the world’s largest ad and marketing company, sources familiar with the talks said. The deal is subject to approval by the boards of both companies and their shareholders and could still fall apart, said the sources, who spoke on condition they not be named. The deal would be the richest ever in the advertising industry, which is consolidating to accommodate multinational firms’ demands to get their sales messages to consumers around the world. The two ad powerhouses, who each declined comment, share a number of major clients such as Ford Motor Co., Mattel Inc., Kraft Foods and Sears, Roebuck & Co. The sources said WPP and Y&R; agreed in principle on key issues of the deal. They said WPP was offering 0.835 of its American depositary receipts for each Y&R; share, which would make the deal worth $4.69 billion after WPP ADRs fell $8.63 to close at $66.88. Y&R; shares lost $4.31, to close at $49.81 on the NYSE.