Kennedys is in early-stage merger talks with top-tier aviation outfit Gates and Partners, in a move which could see the insurance firm branch out into the lucrative aerospace market for the first time.

If the tie-up goes ahead, it will see Kennedys move into a sector currently monopolised by a small number of firms including Clyde & Co, Holman Fenwick Willan and Norton Rose. It is understood talks between the two firms started in recent weeks.

Gates has 54 lawyers, including 25 partners, according to its website, with offices in London, Singapore, Brussels, Paris and Dubai, which the firm opened with the hire of two Clydes lawyers in spring last year.

The firm, which is top-ranked for London and UK aviation by Chambers and Partners, was launched in 2003 by three partners from legacy aviation firm Beaumont and Son – Sean Gates, Adosh Chatrath and Daniel Soffin.

Clydes subsequently took over Beaumonts in 2005, with all 17 remaining partners joining the firm, as part of a wider play to grow in the aviation sector.

News of Kennedys' proposed merger comes after legacy Barlow Lyde & Gilbert's highly-regarded eight-partner aerospace team resigned from the firm to join Holman Fenwick in March 2011.

The team's departure is known to have played a significant role in Barlows' decision to merge with Clydes in November 2011.

Kennedys has expanded significantly in recent years, merging with its Dublin associate office O'Hare O'Connor Walshe in June 2011, in the same month that it launched a presence in Brazil through an association with local firm Torres Marcellino & Associados.

The firm also broke through the £100m revenue mark for the first time this year, with financial results for 2011-12 showing a 12.7% turnover increase on last year to reach £109.1m.

Kennedys and Gates declined to comment.

For more, see Kennedys breaks £100m mark as double-digit growth continues.