By Monday morning, WPP had officially captured Grey Global, the world's seventh-largest advertising company. It saw off competition from a coalition of two US private equity companies - Hellman & Friedman and Kohlberg Kravis Roberts - as well as a weaker third bid from the French outfit Havas.
WPP paid $1.52 billion (or $1,005 per fully diluted share) for the business in a deal that will inflate WPP's total global revenue to just over £8 billion, pushing it almost neck and neck with the world's largest advertising group, Omnicom.
The deal values Grey at 1.07 times its revenue. This compares with a multiple of 2.4 that WPP paid for Young & Rubicam in 2004. However, the City expressed some scepticism that the acquisition was a good one for WPP.
Sorrell has said that he does not expect there to be major changes in the way any of the operating brands are run and added that WPP would continue as a decentralised operation. "The familiar WPP maxim of kiss and punch, compete and co-operate, continues to hold true," he told staff when announcing the new addition to "the family".
Sorrell said the deal would not change the make-up of WPP's geographical or functional splits. "The needle has not moved significantly," he said.
He added that developing WPP's presence in Asia, Latin America, Africa, the Middle East, Russia and Eastern Europe remains a priority. Building the group's marketing services portfolio and expanding its presence in more measurable sectors of the communications industry, such as direct marketing and digital, are also key goals.
However, WPP has stressed it will move quickly to improve Grey's margins.
The network has traditionally poor profit margins - in 2003, it operated at 5.8 per cent of revenue, less than half WPP's figure of 13 per cent.
Sorrell has set himself a target of lifting Grey's margins to 10.5 per cent in 2005 and 11.5 per cent the following year. He has identified £11 million-worth of synergies and will set about combining back-end systems and ensuring Grey quickly adopts WPP's zealous approach to financial management.
Sorrell also believes that costs can be controlled more effectively by improving the management of cash and reducing tax rates.
Speaking to analysts earlier this week, Sorrell pointed out that Grey has a staff cost-to-revenue ratio of more than 60 per cent, whereas most other big agencies operate at between 55 and 60 per cent.
Whether these comments are a prelude to redundancies on a large scale is not clear. Sources within WPP say Sorrell respects creative cultures and that, while some back-end employees may find themselves surplus to requirements, Grey's client-facing staff could emerge unscathed, despite their generous packages.
Grey has a reputation for over-servicing its clients. This may seem inefficient to WPP executives but many of Grey's long-standing global clients have grown accustomed to this level of attention.
In financial terms, the big winner of the deal is Ed Meyer, the Grey Global chairman, chief executive and its major shareholder. Meyer joined Grey in 1956 as an account man but has run the network since 1971. At the time of the deal he controlled 20 per cent of Grey and controls 70 per cent of its voting stock.
Meyer is set to receive $286 million from the deal - $336 million including his stock options. Under the new arrangement he will continue to run Grey for another two years, after which he will be retained as a member of the WPP board.
Meyer's extensive knowledge of Procter & Gamble - Grey's biggest client and the world's top-spending advertiser - plus his other client relationships will be invaluable as WPP beds down the business.
Meyer is expected to name a chief executive for Grey's advertising agency, Grey Worldwide next year. The favourites are Steve Blamer, the chief executive of Grey Worldwide North America, and Carolyn Carter, the president of Grey Global Europe, the Middle East and Africa.
In addition to P&G, Grey Global's client list includes Masterfoods, GlaxoSmithKline and Nokia. The deal will also allow WPP to strengthen relationships with existing multi-national clients such as British American Tobacco, Volvo and Diageo.
P&G has worked with Grey for more than 40 years and in 2003 it accounted for 10.6 per cent of Grey's global revenue. Now Grey is joining the WPP portfolio, P&G will soon be sharing WPP with its rival, Unilever.
Sorrell is confident that, by keeping Grey as a standalone network, he can avoid an immediate conflict. In a memo to WPP employees, Sorrell asserted that P&G had "made it clear they would not stand in the way".
Grey's media network, MediaCom, which works with P&G, is expected to work with WPP's umbrella media outfit, Group M. Group M houses Mediaedge:cia and MindShare - and the latter handles Unilever's business.
There is no precedent for a holding company managing a conflict this large. A P&G spokesman said: "We will work with WPP and Grey through this transition and determine how best to continue to meet the needs of our consumers, our brands and our customers."
In the short-term, observers suggest the fact that WPP now handles Nokia might influence the outcome of its pitch for the global consolidated Samsung account.
But Grey's list of clients also presents a significant new-business opportunity for the WPP multi-disciplinary agencies, particularly its direct networks, which are far stronger than those of Grey.
Looking forward to Sorrell's next major move, Havas is now a possible target.
GREY GLOBAL ASSETS
Grey Healthcare Group
APCO Worldwide (public affairs)
G2 Worldwide (design and brand development)
JBrown/LMC Group (in-store marketing)
G Whiz (youth marketing)
Alliance (branded entertainment)
Wing Latino Group (Hispanic marketing)
Procter & Gamble 1956
Warner Bros 1977
Slim Fast Foods Co 1987
JP Morgan Chase 1990
VW-Audi Gruppe 1998
THE NEW WORLD ORDER
Omnicom Group 8.6
WPP Group 8.1
Interpublic Group 5.9
Publicis Groupe 4.4
Hakuhodo DY Holdings 1.2
Aegis Group 1.1
THE WPP STORY: how Sorrell built an advertising empire
1985: Martin Sorrell quits as the group finance director of Saatchi & Saatchi after seven years. He buys Wire & Plastic Products, a UK manufacturer of wire grocery baskets, to use as a public entity through which to build a global marketing services company. WPP Group is born.
1986/87: WPP develops its below-the-line presence with the acquisition of ten marketing services companies in the UK and US. Using revenue from these businesses, WPP is able to acquire the J. Walter Thompson Group for $566 million. This brings in the JWT advertising powerhouse, the public relations group Hill & Knowlton, and MRB Group, the world's sixth-largest market research network.
1988: WPP launches the European agency Conquest, now Red Cell. WPP enters the FTSE-100.
1989: WPP acquires the Ogilvy Group for $864 million to become the world's largest advertising company. After a tempestuous courtship, Sorrell persuades David Ogilvy, then aged 77, to come out of retirement and take the chairman's job at WPP.
1995: After a spell without any major acquisitions and following a recession, WPP flexes its muscles once again to establish Kantar, the specialist marketing services business, which is to become the parent company for the group's worldwide research interests.
1997: WPP launches MindShare, a new-generation media planning and buying and research company, in Europe and Asia.
1998: WPP forms a strategic alliance with Asatsu-DK, Japan's third-largest agency.
2000: WPP beats French rival Publicis to undertake one of the industry's largest advertising mergers. It buys US-based Young & Rubicam Group for $4.7 billion to create a leading global communications services company. Y&R's finance director, Mike Dolan, is among the senior executives who agree to stay with the group. He takes over as chief executive of the unit.
2001: Sorrell sees off competition from Havas to bring Tempus, the media buying company, into the WPP fold at a cost of around £440 million. CIA's founder, Chris Ingram, nets £64 million from the deal. WPP's The Media Edge, acquired with Y&R in 2000, merges with CIA to create one international group, Mediaedge:cia.
2003: Once again Publicis Groupe loses out as the UK advertising giant wins the battle to buy the crisis-ridden Cordiant Communications in a deal thought to be worth £260 million. The victory marks a dramatic turnaround in events, after investors initially rejected Sorrell's bid. The troubled owner of Bates Advertising is subsequently steered into administration, leaving WPP to cherry-pick its best accounts, which include HSBC, BSkyB and British American Tobacco.
2004: WPP reaches an agreement to purchase Ed Meyer's Grey Global Group, trumping Havas and a joint bid from the private equity companies Hellman & Friedman and Kohlberg Kravis Roberts.
The acquisition narrows WPP's lag behind the world's biggest media holding company, Omnicom, to £0.5billion.