The deal would combine $409 million of Lockton's 2005-2006 revenues and 2,100 people, with Alexander Forbes $202 million in revenue and staff of 1,600 people, for a combined $611 million in revenue and worldwide staff of 3,700. Mr. Lumelleau said there will be no overlap in professionals or services that would result in staff reductions.

Once the deal is closed, Lockton will serve clients from 142 local offices in 43 countries.

The deal does not involve Alexander Forbes' International Financial Services business.

In company statements, Lockton and Alexander Forbes said the companies have worked together to place business in the past, but this is a new opportunity to combine efforts. "We see this as a growth opportunity in terms of both revenue and people," said Mr. Lumelleau.

He said that besides expanding the firm's geographic reach, it would also complement a number of niche businesses and open new opportunities--such as in marine and professional liability insurance in Europe (primarily errors and omissions for attorneys).

Chris Darst, vice president with the agency consulting firm Marsh, Berry & Company Inc., based in Concord, Ohio, said in an e-mail that the move supports the direction many brokers are moving in to grow their businesses through a combination of acquired and organic growth.

"Individually, both these organizations maintain unique strengths with respect to market specialties, service, retention and differentiation," said Mr. Darst. "The combined entity should only serve to expand upon past organic growth success."

The Alexander Forbes business will be renamed Lockton International Holdings Ltd. and keep its headquarters in London.

"This deal underscores the market demand for a global broker alternative to Marsh, Aon and Willis," Mr. Darst said. "In a new era of transparency and disclosure, Lockton International Holdings Ltd. will be well suited to capitalize upon state-of-the-art differentiation platforms and service capabilities by taking an auditable stewardship report out to the global market. This will ensure that promises made to insureds are promises kept."

Mike Hammond, deputy chairman of Alexander Forbes Insurance, will become executive chairman of Lockton International. John Percy-Davis, executive chairman of Alexander Forbes, will remain in his position as chairman of EOS RISQ--the European broker partnership--and continue to work closely with Lockton.

Lockton will hold majority ownership in Lockton International, with minority investment from management and Trident III, L.P.--an investment fund managed by Stone Point Capital, LLC of Greenwich, Conn.

"Stone Point's involvement brings a wealth of knowledge about global markets and the brokerage business, along with access to acquisition capital," noted Mr. Darst. "By bringing Stone Point into the mix, Lockton also significantly enhances the probability of eventually going public as an exit strategy."