Tequila\London, which will employ 260 staff, will be headed by the joint chief executives, Tim Bonnet and Penny Reid. Bonnet and Reid, the former respective heads of Tequila and TBWA\GGT, will report to Rod Wright, the president of Tequila\Worldwide.
Mike Cornwell, previously the chief executive of TBWA\ GGT, becomes the managing director of Europe. The agency's chairman, Peter Herd, is stepping down in January to pursue interests outside of the agency.
The combined creative department will be led by TBWA\GGT's Nick Moore, who has been promoted to the role of executive creative director. The Tequila creative director, Nick Schanche, will report to Moore in the role of creative director.
The merger, first revealed in Campaign in October, ends the years of speculation over the future of both agencies. TBWA\GGT only operates in the UK, while Tequila has been building a global presence over the past four years and is aligned with TBWA.
Tequila\London will be based in the former TBWA\ GGT offices in London's Dean Street, Soho.
Paul Bainsfair, TBWA\ Worldwide's president of Europe, said: "This gives the agencies a unique and highly competitive position. Together, they will be an even stronger partner for TBWA\ London and will ensure our clients benefit from unparalleled integrated solutions."