Newell and Sorrell is to be merged with Omnicom's wholly-owned subsidiary, Interbrand UK, which developed the Metro, Maestro and Montego names for British Leyland in the Seventies.
Tom Blackett, deputy chairman of Interbrand, said the enlarged company, Interbrand Newell and Sorrell (INS), would be the largest brand consultancy in the world, with a turnover of pounds 20m and 200 staff in the UK.
He said Newell and Sorrell was "an extremely good corporate identity business" but would not be drawn on how much Omnicom had paid for it.
Newell and Sorrell ran into controversy earlier this year when it redesigned BA's corporate image. The Union Jack logo was ditched in favour of ethnic art from around the world as part of BA's pounds 60m revamp. However, critics said the airline had lost its British identity and should have focused on settling industrial action by its cabin crew rather than wasting resources on its image.
Husband-and-wife team John Sorrell and Frances Newell have been responsible for creating some of the country's best-known brands, including the InterCity swallow. They set up shop in 1976 and now have offices in London and Amsterdam, devising and developing brands for clients such as Boots, Waterstone's and Schweppes.
Mr Sorrell, chairman of Newell and Sorrell, becomes chairman of the new company. However, roles for Ms Newell and Janet Fogg, chief operating officer of Interbrand UK, have not yet been finalised.
Mr Sorrell said INS would be unique. "Interbrand has pioneered new techniques and processes in the fields of brand strategy and Newell and Sorrell is recognised as one of the most inspiring and effective identity consultancies," he said.
Interbrand, founded 23 years ago and with 500 staff world-wide, has done work for Hob Nobs, Zeneca and Volvo. Omnicom bought the business in 1993, turning its founder, John Murphy, into a millionaire.
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