Gram and Fallon have previously worked together on clients including Sony and Citibank, but Gram's 20 employees will now relocate to Fallon's new Tokyo offices.
As Japan moves out of the worst of a long-term recession, Fallon Tokyo is launching on the back of key clients Sony, United Airlines, Timberland and Citibank.
The Gram founding partners Tamio Koshino and Mitsuru Kubota will run the agency with Phil Rubel, who was most recently the chief operating officer of McCann-Erickson Japan.
Koshino and Kubota were former Dentsu executives. They founded Gram in 2000.
Pat Fallon, the chairman of Fallon Worldwide, said: "Tamio, Mit and Phil share our values and our vision of a global creativity company committed to excellence everywhere we do business."
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