Lowe and Deutsch to be merged

Reports further say that, such a combination would give Deutsch global reach and amplify Lowe's offering in the U.S, however, that past talks had failed to produce a merger and obstacles remain before the two agencies can come together. Globally, Lowe has some 70 offices -- including affiliates -- and revenue of about $400 million. Deutsch's two domestic offices, in New York and Marina del Rey, Calif., generate revenue of about $200 million.

The possible merger comes after the shops have discussed working together on Deutsch client Kodak and have partnered on a global new business pitch for Novartis. Lowe may help Deutsch distribute ads for Kodak printers overseas, and last month the shops collaborated on a pitch for global creative duties on Novartis' Prevacid, according to sources. The pitch was unsuccessful, but the experience was in positive terms.

The shops also share a major client in Johnson & Johnson, with Deutsch handling U.S. creative duties on Tylenol and Lowe working on the company's line of baby products, among other brands.