The merger, which has been approved at board level, will create a combined company consisting of 8,600 employees across 23 countries and which will run a media and data operation worth $4.4bn.

The companies said the merger would save around $30 million from operational efficiencies and integrated services, with 90% of these savings expected to be achieved within 24 months. The company will be headquartered in New York.

The merger follows a $100m investment made by Stagwell last year into MDC through the purchase of $50m in common shares and $50m in non-voting convertible preference shares.

MDC shareholders will receive 26% of the combined company’s common equity as part of the merger. Stagwell shareholders will be issued shares of a new Class C series equivalent to 74% of the common equity of the combined firm.

The management team for the company will consist of existing executives from Stagwell and MDC, and the combined board will have nine members in total, four of whom will be from Stagwell and three of whom will be independent members.

Mark Penn (pictured), chair and chief executive of MDC Partners and managing partner of The Stagwell Group, will continue to lead the combined company.

Penn said: “This is a new day for MDC and Stagwell. Unencumbered by legacy structures or assets, the combined company will have the integrated, modern offerings marketers deserve, and the resources to invest meaningfully in our global capabilities, our talent, and our clients’ future.”