Paris-based Publicis Groupe agrees acquisition of Razorfish from Microsoft.

Microsoft has sold its advertising arm – Razorfish – to French advertising and communications agency, Publicis Groupe, for around $530 million (£318m).

Microsoft announced its intention to sell the company in June. The two companies jointly announced the agreement regarding Razorfish – a leading digital marketing agency – and said payment would be part cash, part Publicis Group treasury shares. The venture is likely to be completed during the fourth quarter of 2009.

Steve Ballmer, Microsoft’s CEO, commented: “We look forward to continuing to work with Razorfish as one of our agencies, and we’re confident that as a part of Publicis Groupe, Razorfish will build on its success to date in the digital advertising industry.”

Publicis, whose clients include Airbus, Coca Cola, L’Oreal and Hewlett-Packard, is a giant in the world of advertising and has subsidiaries all over the world, which include top agencies Saatchi & Saatchi and Leo Burnett Worldwide.

Maurice Levy, Chairman and CEO of Publicis, said: “The acquisition of Razorfish is another step forward in realising our strategic vision of building a world leader in digital communications, a critically important space for our clients.

“More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world.”

In addition to the sale of Razorfish, the two parties have signed a Strategic Alliance Agreement, which means agencies under the Publicis Groupe umbrella will be able to purchase display and search advertising from Microsoft under favourable terms for the next five years.

The statement announcing the buyout confirmed that the management team at Razorfish will remain in place.