French advertising agency Publicis said Monday it had bought US digital marketing specialists Sapient for $3.7 billion (2.95 billion euros) in cash. The deal values the US-based company at $25 per share, which represents a 44-percent premium to Friday's closing share price.

Publicis Chief Executive Maurice Levy said the acquisition was part of an effort to revitalize the French group at a time when its quarterly growth was lagging rivals.

"It will give Publicis access to new markets and create new revenues streams," Levy said in a statement.

Sapient is based in Boston, Massachussetts and considered a pioneer of Internet-based advertising technology. It had turnover of $1.36 billion and profits of $85.9 million in its last financial year. On Friday, speculation about the imminent deal pushed Sapient's shares up 2.79 percent to $17.32 on the Nasdaq.

Hopes for growth rebound

Publicis, which is the world's third largest ad group, has seen growth flagging in recent months. CEO Maurice Levy blamed the poor performance on the fallout of the company's failed "merger of equals" with world number two ad agency, Omnicom, which was abandoned in May over control and cultural issues.

The failure of the Omnicom deal, which would have created an advertising giant employing 130,000 staff with annual sales of 20 billion euros, led to a boardroom shake-up at Publicis.

Publicis said the transaction was expected to save the group 50 million euros in annual costs, but didn't say when it would add to group profits. Sapient boss Alan Herrick will remain as the company's CEO, while the current co-chairman, Jerry Greenberg, will become a Publicis board member.

uhe/ng (AFP, Reuters)