M&A frenzy among Hollywood talent agencies to compete with CAA and WME

The Hollywood representation agency industry has been a hotbed of M&A activity as smaller and mid-sized firms attempt to compete with twin giants WME and CAA.

Why it matters: CAA's buyout of rival talent agency ICM last year kicked a hornet's nest that could lead to a reshuffling of the agency hierarchy below the top two.

Driving the news: Agency for the Performing Arts (APA) announced Wednesday it was merging with touring and music-focused Artist Group International to form a new, full-service firm called Independent Artists Group.

• APA president Jim Osborne will lead the new company as CEO, with AGI's CEO Dennis Arfa serving as chairman of the new firm's music division.
• The board of IAG will consist of Osborne, Arfa and former APA CEO Jim Gosnell, who will be in charge of growth opportunities.
• The combination puts Hollywood talent including Gary Oldman, Regina Hall and Margaret Atwood under the same roof as music stars Billy Joel, Metallica, Def Leppard and The Strokes.

Of note: In the wake of the CAA-ICM deal, which led to many ICM departures, APA hired 21 agents and signed 300 new clients in a bid to punch above its weight.

State of play: APA isn't the only agency that's made moves in recent weeks.

• In the first of two deals this week, United Talent Agency (UTA) acquired New York-based executive search firm James & Co., which focuses on the media, tech and sports space.
• The second was Range Media Partners — a management and production firm formed by many ex-CAA, UTA and WME agents — completing a merger with "La La Land" producer Automatik.

• Last week, UTA opened up a new office in London's Soho district — its prior digs were in the Angel area of North London.
• Not to be outdone, WME bought Washington, D.C.-based literary agency Ross Yoon earlier this month.
• In May, Gersh sold a 45% stake to private equity firm Crestview.

Yes, but: The agency dealmaking comes as Hollywood — already in the midst of a nearly two-month writers strike — faces the prospect of an even broader shutdown if the studios can't reach a deal with the actors guild.