The Capital Pub Company, which has 34 pubs in some of London’s best post codes, accepted a £70m cash offer after rejecting Fullers’ £54m takeover approach last month.
Suffolk based Greene King is keen to expand its presence in what it described as London’s “growing premium eating and drinking out market”.
The deal if accepted by Capital’s shareholders, creates a combined group comprising 250 pubs in Greater London.
Greene King’s offer is for 235 pence per share, beating Fullers’ offer of 200p per share.
Capital’s shares were trading at 155.5p before the offers were made.
On Tuesday, its shares jumped 12% to 236p after accepting Greene King’s offer.
The deal marks Greene King’s third pub group acquisition this year following the takeovers of RealPubs and Cloverleaf for a combined £108m.
Clive Watson, co-founder and chief executive of Capital Pubs, said: “Greene King is an excellent cultural fit and will be a good home for both the business and our staff.”