Saatchi & Saatchi is holding merger talks.

The London-based advertising agency said the outcome of the talks with the privately owned Ted Bates agency of New York "isn't currently known." If consummated, however, the merger of the two firms would create the largest advertising agency in the world, with combined billings of $6.5 billion. Saatchi's most famous British client is Prime Minister Margaret Thatcher, whose public image has been molded by publicity experts from the firm.