In an deal that gives AKQA an enterprise value of $540m (£343m), WPP bought General Atlantic out of its 80 per cent stake and took an undisclosed amount of the 20 per cent owned by management.
The private equity firm made a profit on its investment, for which it reportedly paid around $250 to $300m in 2007.
AKQA founder and chief executive Ajaz Ahmed and chairman Tom Bedecarre will continue to run WPP’s new subsidiary, which will operate as a stand-alone brand within the ad giant’s empire.
Bedecarre will also head up WPP Ventures, a new Silicon Valley-based company charged with the mission of exploring new digital investment opportunities for the global group.
Founded in 2001, AKQA – which has racked up 19 Agency of the Year titles – employs 1160 people across the US, Europe and Asia.
Counting Google, Nike and Unilever among its clients, AKQA rolled in $189m last year and is set to generate revenues of $230m in 2012.
WPP boss Sir Martin Sorrell said he was “thrilled” to announce the deal. “We have admired [AKQA’s] creativity and technological skills for a long time,” he added.
AKQA rejected a $600m bid from ad giant Dentsu two years ago.