Marsh has reached an agreement to acquire Jelf, with the entire share capital of Jelf being bought at 215p per Jelf Share, for a total price of £258m for all shares.
The possibility of a takeover was announced on the London Stock Exchange in August 2015.
The acquisition has been approved by the directors of Jelf, who will recommend to shareholders to vote in favour of the scheme at a Court Meeting and General meeting to approve the deal.
Marsh has also received irrevocable undertakings for votes in favour from others holding 54% of voting shares, in addition to the directors'.
Jelf, founded in 1989 has 37 offices in the UK and the acquisition follows Marsh's acquisition of Leeds-based SMEi Insurance Services and Aberdeen-based Central Insurance Services, adding to Marsh's services provided to UK SMEs.
Alex Alway, CEO of Jelf Group plc, said: "I am extremely proud of the business that we have built since Jelf was founded in 1989.
"Every one of our colleagues has contributed to our deserved reputation for developing long-lasting, trusted adviser relationships with our clients.
"As our clients' needs have continued to evolve, the Board and executive management team have given much thought about how best we meet their growing expectations.
"At the same time, we want to ensure that our colleagues are given the greatest opportunities to develop their careers.
"I am confident that this transaction is great news for our clients and colleagues alike."
Mark Weil, CEO for UK & Ireland at Marsh, said: "Jelf and Marsh are highly complementary businesses, both in terms of business and values.
He added: "We have the highest regard for the management and team at Jelf and expect they will be a huge asset as, together, we provide the market-leading suite of solutions to our clients. We look forward to welcoming Alex and his team to Marsh."
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