Marsh & McLennan is said to be selling Putnam

Marsh & McLennan Cos., the world’s largest insurance brokerage, agreed to sell its Putnam Investments asset management unit to Canada’s Power Corp., said a person familiar with the negotiations.

Power, which controls Canada’s biggest mutual fund company through its Power Financial Inc. unit, will pay $3.9 billion, the Wall Street Journal reported Friday. Analysts had valued the Boston-based firm at $3 billion to $4.5 billion.

The deal will remove a challenge for New York-based Marsh & McLennan, which has lost about a third of its stock market value since a 2004 lawsuit over insurance sales practices. Putnam’s managed assets, hurt by lagging fund performance and probes of alleged trading abuses, dipped to $180 billion in June, their lowest level since 1997.

During the three years through October, Putnam’s U.S. stock funds returned less than stock funds at 18 of the 20 largest fund firms, according to Russel Kinnel, an analyst at Chicago-based Morningstar Inc.