Publicis Groupe announced that it will acquire Digitas for $1.3 billion.

"We have been seeking to make an important strategic acquisition which could really boost our presence in the digital marketplace. The acquisition of Digitas Inc. allows us to immediately attain our goal of being one step closer to the future. With Digitas, Modem Media and Medical Broadcasting Company, Publicis Groupe becomes a world leader in digital communications," said Maurice Levy, chairman and CEO of Publicis Groupe.

The deal is the industry's largest since WPP Group bought Grey Global Group for about $1.75 billion in 2005, reports AdAge.com.

Digitas Inc. will be an autonomous unit within Publicis Groupe. It will be led by Digitas Inc. CEO David Kenny, who will report directly to Maurice Levy.

Forrester Research Analyst Harley Manning says, "This looks like a good deal for both Digitas and Publicis. The interactive agency business has been undergoing rapid growth in 2006 on top of high growth in both 2005 and 2004. What's more, agency execs tell me that finding people to handle increasing demand is a top priority, and our clients tell me that many of the biggest agencies are too booked up to respond to their RFPs. Putting these things together I see even more growth in 2007 and the foreseeable future. In contrast, traditional ad agencies have been struggling as companies like McDonald's shift budget from television to online."