Innocean Worldwide Inc., the advertising unit of South Korea’s Hyundai Motor Group, is working on striking a deal to acquire U.S.-based advertising agency David & Goliath (D&G) within this month.

According to sources from the investment banking (IB) industry on Monday, Innocean and D&G have been in talks since the second half of this year. An official from Innocean said that the company hopes to finalize the deal by the end of the year.

Shares of Innocean finished Tuesday up 0.39 percent at 76,700 won in Seoul trading.

Founded in 1999, the Los Angeles-based D&G has a firm foothold in the world’s biggest advertising market in the U.S. It was credited for raising brand awareness of Kia Motors Corp.’s compact SUV Soul by creating an ad featuring singing hamsters that quickly went viral in 2010. It also produced commercials for the U.S. biggest sporting event the Super Bowl. Its current clients include Universal Studios, California Lottery, Jack in the Box, to name a few. Industry watchers believe that Innocean expects the takeover of D&G would help it to expand its business in the global market as well as to boost its sales.

Innocean has been showing a sound performance driven by steady growth of its overseas operations. Its American business accounted for 48 percent of the company’s entire sales in the third quarter this year. Revenue of the U.S. business contributed 42 percent to its overall sales in 2016, surpassing the Korean business’ contribution rate of 33 percent. Canvas Worldwide, its joint venture with Horizon media, is also broadening its presence in the U.S. media market.

If successful, the acquisition would help Innocean to further bolster its American business. Its overseas sales are expected to rise if it secures ad orders by Kia Motors carried out by D&G. Innocean held 637.4 billion won ($584.6 million) in net cash reserve as of the end of March this year, accounting for about 50 percent of its current equity capital value.

By Hwang Soon-min and Choi Mira

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