PHD will replace OMD's offices in Stuttgart and Frankfurt. It will take on the offices' clients, which include Daimler-Chrysler and Hugo Boss.
Katrin Grunmeier (pictured), previously the managing director of OMD Stuttgart and Frankfurt, will head the new operation. The move leaves OMD with four offices in Germany.
Omnicom is also setting up an overarching Omnicom Media Group Germany structure, under which OMD, PHD and OPera will operate.
Manfred Kluge, the chief executive of OMD Germany, will head the group.