Two companies have been tipped as possible candidates to buy Gallagher Re

Aon Re and Benfield have been tipped as potential candidates to buy US reinsurance broker Gallagher Re, which was put up for sale this week.

The ‘for sale’ sign was raised over Gallagher Re by parent company AJ Gallagher, following an announcement in its full year financial statement. The company said it expected to complete the sale of the loss-making division by early 2008.

AJ Gallagher also announced the sale of its wholesale broker operation in Ireland, and that 400 back office jobs would be cut.

Patrick Gallagher, chairman, president and chief executive of AJ Gallagher, said: “In the fourth quarter of 2007 we undertook a strategic review of our operations and have made a determination to sell our global reinsurance operations.”

He added: “While the sale of these operations will reduce our top line revenues, it will have a favourable impact on the broker segment’s earnings and pre-tax margins.”

Toby Esser, chief executive of Lloyd’s broker Cooper Gay, said: “AJ Gallagher is a very conservative Midwest company, but it is a well run business, and has a good stock price. Aon Re seems the most obvious candidate [to buy Gallagher Re].”

There has also been speculation that Benfield, which itself has often been tipped as a takeover target, could look to make a move on the reinsurance broker.