WPP Group is understood to be back in discussions with Young & Rubicam about a £2.5 billion take-over of the New York advertising network.
Talks are thought to have resumed after foundering in early March following disagreement over severance packages for senior Y&R executives. However, with talks back on, it looks like the two have found a way through the early problems.
The acquisition of Y&R would make WPP Group the largest advertising group in the world and give it a third advertising network to complement Ogilvy & Mather and J Walter Thompson networks it already owns.
A merger would also strengthen WPP's hold on the Ford account. Both O&M and Y&R handle Ford's account and any deal would have to involve talks with the motor giant.
Rumours about a WPP take-over have been around for some time and Sorrell has previously told Campaign that Y&R would be a good strategic fit with his portfolio of advertising assets.