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Bates Worldwide looks likely to be broken up, with reports suggesting that within Europe, it could be folded into Red Cell, while in the US, it is likely to be merged with J Walter Thompson.

Sir Martin Sorrell, group chief executive, said that WPP was working with Cordiant staff and clients to determine the best fit for Cordiant's agencies and this, he said, would result in parts of Cordiant "working closely with parts of WPP".

There could be some exceptions, as WPP tries to sort out the client conflict between Ford, its biggest client, and the Spanish carmaker Seat, which uses Bates.

One mooted solution is for WPP to create an office in Barcelona, under the Bates name, specifically to handle Seat. Sir Martin said that instances like this it makes sense to retain the Bates name.

It is estimated that more than 25% of Cordiant's revenues come from clients the two already share. These include British American Tobacco, Pfizer, Kraft, Estee Lauder, Nokia and Microsoft.

With the addition of the extra clients, reports suggest WPP only needs to add £300m of Cordiant's revenues to close on its rival, and world number one ad group, Omnicom. The acquisition will firmly place WPP in the number two slot, leapfrogging troubled Interpublic Group.

The £300m appears to be very achievable, according to estimates published by Morgan Stanley in a research report. In 2003, it said Cordiant had revenues of £533m, £410m of which came from advertising and £123m from specialist communications.

"Since then, we estimate £128m have been sold and at least £30m lost through client defections (Allied Domecq accounted for c.£18m of annualised revenues). The revenues from Zenith are not consolidated since Cordiant only owns 25%.

"This leaves us with £375m of revenues for 2003, and thus to get to WPP's guidance of £300m of revenues from Cordiant we must assume a further £75m will be lost through client defections or changes in terms of business. This appears to be a fairly aggressive number and we believe revenues may well stabilise at more than £300m," the bank's research report said.

Cordiant is already in the process of disposing some of its assets, including the Australian advertising agency George Patterson Bates. A proposed management buyout at the financial PR firm FD International, is tipped to be given the green light by WPP. It had been agreed by Cordiant some time ago, but with the ad group's future uncertain, the £25m sale, backed by private equity firm Advent, was stalled.

There will likely be redundancies at Cordiant, especially in the back office operations.

One Bates executive whose position at the post-merger company looks secure is Toby Hoare, group chief executive of Bates UK and president of Bates Europe. However, Sir Martin told ±±¾©Èü³µpk10: "I hope we find something interesting for him."

With one of Bates UK's remaining clients, the homewares retailer B&Q, set to shift to J Walter Thompson, at least some of the team are likely to find work at WPP. However, Bates has already made redundancies following the losses of Royal Mail and Woolworths earlier this year.

WPP won the battle for Cordiant on Thursday after a three-way tussle against Publicis Groupe and Cordiant shareholder Active Value. The terms of the deal will see WPP pay a notional figure of £10m for Cordiant, as well as taking on £250m of the stricken advertising agency's debt.

Active Value does not support the deal and there is still a chance that it could try to gather support or build up its 16.7% stake to try to thwart the deal, but this would be an incredible gamble. Active Value has already lost and it might not be willing to throw away further cash at trying to take control of Cordiant.

For WPP, the deal appears to be mostly positive. It has bought at the bottom of the market and most accept it has bought cheap, allowing for it to get maximum value out of the deal.

According to analysts at Morgan Stanley: "This isn't an expensive deal, in our view, but there are still question marks over where revenues will stabilise given the risk of client losses. In addition, there is a far from impressive record of the industry in successfully integrating underperforming acquisitions. Snyder and Young & Rubicam spring to mind."

Other than Bates, it will be strengthened in several ways: it will add Healthworld to its growing healthcare marketing business, made up of CommonHealth and Sudler & Hennessey; while design firm Fitch will join branding group Landor and Enterprise IG.

The other piece of the puzzle everyone wanted was 141 Communications, which will join WPP's marketing services business Wunderman and OgilvyOne.

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