Interpublic Group-owned agency Lowe Australia is in talks to purchase the Australian indie agency 303 Advertising.
The acquisition would see 303 take control of the local operation, with 303 chief executive Nick Cleaver the most likely candidate to take the top role.
The local Lowe operation has been quiet of late. An inside source has told AdNews the office has been reduced to 20 staff members.
Lowe has been hampered by creative departures, including the departure of executive creative director Mike Barnwell last year, following by the exit of his replacement Melissa Peters earlier in the year.
In contrast, 303 is the largest independent agency in Australia, with 110 staff.
The agency claims it has not lost an account in the last year, and has won work with clients such as Cerebos, Allergan Health, Southern Cross Travel Insurance and Think Brick.
Cleaver refused to be drawn on whether the agency was being sold to Lowe.
He told AdNews: "Over the last few years, we have regularly been approached by multi-nationals. I would never comment on any such approach.
"The market is saying, '303 is a large indie, so it must be selling'. It's a reflection of where the business has got to. The market is talking because there has been an acquisition of another indie recently."
Cleaver was referring to Havas' 51% acquisition of indie agency Host.
Several sources have confirmed that the deal has not been finalised, but that both companies are in advanced talks.
There has been speculation in the market for several months that Lowe was looking to bolster its local operation.
Lowe Australia chief executive Stephen Pearson was unavailable for comment at the time of writing.
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