Commerzbank, Frankfurt, is negotiating to acquire Montgomery Asset Management, a unit of Montgomery Securities, San Francisco.

Executives at both companies declined to comment. However, Curtis Hoxter, a spokesman for the German bank in New York, said that negotiations were progressing and a deal could be concluded in several weeks.

The Montgomery unit has some $7.5 billion of assets under management for institutional, private, and retail investors. Commerzbank, Germany's fourth-largest, with $281 billion of assets, has been seeking to build a global asset management operation in the wake of similar moves by other big German and Swiss banks.

Dresdner Bank, Germany's second-biggest, last year acquired RCM Capital Management, another San Francisco-based money manager, which had $26 billion under management. Union Bank of Switzerland several years ago acquired Chase Manhattan Corp.'s institutional fund management business and has $35 billion, while Credit Suisse has $31 billion.

In July 1995, Commerzbank acquired 60% of Martingale Asset Management, a small Boston-based fund manager specializing in quantum asset management, with an option to raise that stake to 70% by 1998. That same year, Commerzbank acquired Jupiter Asset Management in London but lost out in a bid to acquire Smith New Court PLC, a British brokerage and asset management firm.

In the United States, where it has some $8 billion of assets, the bank has operated mainly through its New York branch.

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