Insurance brokerage Arthur J. Gallagher & Co. agreed to pay $938 million for the insurance brokerage units of Australian conglomerate Wesfarmers Ltd.

The deal is by far the biggest in the history of Itasca, Ill.-based Gallagher, which has grown over the past two decades mainly by acquiring small, privately held insurance brokerages in the U.S.

But as Gallagher has grown, it's begun to take on significantly bigger acquisitions in order to make them meaningful to its bottom line. It's also hunting more earnestly outside the U.S.

In September, Gallagher unveiled what was then its largest buyout on record — the $364 million acquisition of London-based Giles Group of Cos.

The Wesfarmers operations Gallagher is buying have about 1,700 employees in more than 50 offices in Australia, New Zealand and the U.K., Gallagher said in a statement.

"This acquisition represents an important strategic step for our company by significantly expanding our presence in Australia and New Zealand,” Gallagher Chairman, President and CEO J. Patrick Gallagher Jr. said in the statement.

"Our combined operations will become one of the largest insurance brokers in Australia and New Zealand. Their focus on middle-market clients aligns well with our global client base and will provide us opportunities to bring our full range of services to their existing clients and prospects.,” he said in the statement.

Gallagher said it expects to use free cash, credit-line borrowing proceeds from issuing equity to finance the acquisition.

The Wesfarmers brokering businesses include OAMPS Insurance Brokers Ltd. in Australia, OAMPS (UK) Ltd. and Crombie Lockwood Ltd. in New Zealand.

Wesfarmers, which owns coal mines, chemical producers and an investment bank, has been shifting spending to its Coles supermarket chain it bought in 2007 in Australia's largest corporate takeover. The company agreed to sell its insurance underwriting business to Insurance Australia Group Ltd. for $1.85 billion Australian on Dec. 16.

Bloomberg contributed to this report.

This story first appeared on Crain's Chicago Business, a sister publication of Business Insurance.