Grayling chief executive Nigel Kennedy said the decision, which has seen Grayling France move into Euro RSCG's Paris offices, was made in a bid to cut costs and boost business.
But the group confirmed there are no plans to merge other Grayling offices into the Euro RSCG network.
Kennedy said: 'Grayling France was doing OK but we felt it would do better working with other brands in the Havas structure.'
He added: 'There's an element of the need to recoup cash through the merger. But in strategic business terms, Grayling France was offering a pure PR and PA service and, in France, there's much more scope for a linking PR into a broader marcoms offering.'
Grayling France will continue to handle work through the Grayling network under the same brand name, but will operate as Euro RSCG on a day-to-day basis.
'Grayling France should prosper far better now than it could have done before, but won't lose any of its international capabilities,' said Kennedy.
The Grayling team has doubled the size of Euro RSCG's corporate PR division to more than 40 people and boosted PR revenues to £5.5m.
Grayling France president Daniel Verpeaux has been named vice-president of Euro RSCG C&O, working with fellow vice-president Bernard Sananes, who heads the PR and corporate team at Euro RSCG.
Verpeaux will now report to Euro RSCG C&O president and chief executive Stephane Fouks instead of London-based Kennedy.
Havas, which rebranded from Havas Advertising in May, scrapped its Diversified Agencies Group (DAG) division last October amid a restructure.
Grayling was formerly part of the DAG group.