Named 2MV, the agency will be headed by Yves Del Frate, currently global account director at MPG. It will be active in the UK, France, Germany, Italy, and Spain. Mark Mendoza, MPG's UK chief executive, is to double as the UK chief executive of 2MV.
Group M houses WPP media agencies MindShare, Mediaedge:cia and Maxus.
Havas had been understood to be looking for a partner to give MPG better coverage outside Europe, and was reportedly talking to Interpublic before Christmas.
The alliance with WPP is surprising in the light of past rivalry between the two holding groups. Havas' chief executive Alain de Pouzilhac has lost out twice to WPP chief executive Sir Martin Sorrell in bids to acquire other advertising groups.
De Pouzilhac called Sorrell "a master of manipulation" after WPP beat Havas to acquire Grey Global in September 2004, bringing it another media agency, MediaCom, which remains within Grey. The result was widely seen as consigning Havas to the second tier of global holding groups.
WPP had already trumped Havas in 2001 to take control of Tempus, after which it merged its The Media Edge with Tempus's CIA media buying agency to form Mediaedge:cia.
In 2003, De Pouzilhac labelled Sorrell arrogant and one of life's "bad guys" after Publicis Groupe lost the fight with WPP for Cordiant Communications.
At the time, De Pouzilhac said: "There is nothing I hate more deeply than arrogance. Normally, it is the French who are arrogant but I have found one guy who is more arrogant than our entire nation put together."
MPG was recently hit by the losses by its North America division of the $500m (£265m) Volkswagen and $300m Intel media planning and buying accounts.
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