WPP combines famous JWT ad agency with digital arm Wunderman

(Adds quotes, details)

By Kate Holton

LONDON, Nov 26 (Reuters) - WPP (Frankfurt: A1J2BZ - news) is merging its famous JWT agency with its digital outfit Wunderman in the most high-profile move by the world's biggest advertising group to simplify its business.

JWT, founded in 1864 and headquartered in New York, is one of the world's best known advertising agencies, behind the Andrex puppy ads and jingles for Toys R Us.

WPP is restructuring after clients complained that with 130,000 people in 112 countries it had become too difficult to do business with. It has cut forecasts and lost major clients, sending its shares down 35 percent in the year to date.

It has already merged the Y&R agency with VML but the change to J Walter Thompson, the first agency to air a TV commercial, shows how far WPP is willing to go to overhaul its business.

JWT's customers include HSBC, Unilever (NYSE: UL - news) , Rolex, Nestle (Swiss: NESN.VX - news) and others, while Wunderman works with Microsoft (Euronext: MSF.NX - news) , Investec (LSE: INVP.L - news) and Danone (LSE: 0KFX.L - news) .

"Wunderman Thompson is a formidable combination, bringing together the capabilities our clients are demanding – award-winning creativity alongside deep expertise in technology, data and commerce," WPP CEO Mark Read said.

"(This) allows us to compete more effectively in the sectors with the most significant opportunities for future growth."

Read, a former boss of Wunderman, took over the top job at WPP in September, replacing founder Martin Sorrell who quit in April following a complaint of personal misconduct, which he denied.

The new agency, with 20,000 staff in 90 markets, will be run by Mel Edwards, CEO of Wunderman, while Tamara Ingram, head of JWT, will become chairman. (Reporting by Kate Holton; Editing by Adrian Croft and Alexander Smith)