Deal Makes Marsh Top Insurance Broker

Marsh & McLennan Cos. agreed to buy privately owned Johnson & Higgins for $1.8 billion in cash and stock in a deal that would reinstate Marsh as the world’s biggest insurance broker.

The announcement Wednesday marks a further consolidation in the insurance brokerage business, which is in a slump. Premiums, which form the basis for brokerage commissions, have softened, and investors have become increasingly interested in buying investment products rather than insurance.

The deal will enable Marsh to become more competitive and to respond more effectively to “the increasing and more complex risks our clients encounter,” said A.J.C. Smith, Marsh’s chairman and chief executive.

Marsh said it would pay about a third of the purchase price in cash and the rest in stock. The deal requires regulatory approval, but is expected to be completed by the end of June, the companies said.