• The New York Times, Wednesday, December 20, 2006 11:45 AM

Valassis Communications, the largest provider of newspaper inserts, and Advo, the direct-mail marketer, agreed to end their disagreements yesterday and announced that they would complete a merger that has been in the works since July. The combined company will be the largest media- services provider in the U.S., serving 20,000 advertisers worldwide, including 94 of the top 100.

Valassis filed suit in September seeking to back out of its agreement to buy Advo for $1.3 billion. It claimed the company had misrepresented its financial results in the second quarter.

The two companies came to terms after the board of Advo agreed late Monday to drop its asking price to $33 a share from $37, and Valassis acknowledged that it had found no evidence to support its claim of having been defrauded by Advo.

A person familiar with the transaction said that Valassis had until Feb. 28 to close the deal or two business days after Advo shareholders approve it, whichever comes later.

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