With its overtures to Robert Fleming Holdings of the United Kingdom, Chase Manhattan Corp. showed that it ranks among the few top-tier U.S. banking companies that still have the currency and the will to pursue acquisitions as a path to growth.

Chase and Robert Fleming said Thursday that they were in the "early stages of talks" on a possible combination. Word that Chase was discussing a possible purchase of the U.K. investment bank and asset manager were reported earlier in the day by the Financial Times.

Chase declined to comment beyond a brief statement but, according to a source familiar with the matter, it is most interested in the asset management aspect of Fleming's operation, which has $145 billion under management, 90% of it equity, mostly invested in Asian securities.

Fleming also has equity underwriting and a considerable research presence, with 275 analysts in Asia, and it performs institutional brokerage, sales, and trading. Asset management is a higher-growth business overseas. Chase has $200 billion of assets under management but about half of that is in equities, mainly in the United States.

Investors responded favorably to news of a potential acquisition. In a generally good day for bank stocks, Chase's share price rose 7% to close at $98.50 Thursday. That was significant, because the market has not always viewed rumors of a deal by Chase - and there have been many over the last several years, with Merrill Lynch and Deutsche Bank AG as perennial favorites - so positively. "Over the years my clients have seemed apprehensive of what Chase might do to build out," such as overpaying for an acquisition, said David Berry, director of research at Keefe, Bruyette & Woods. Those fears have lessened over the last few years, as Chase was recognized for building its global bank and handling mergers smoothly.

"They've had a lot of success building out of their traditional money-center bank to penetrate Wall Street," Mr. Berry said.

A move to buy Fleming would take Chase down a different path from that of the top U.S. investment banks, which have been establishing European beachheads over the last several years strictly through internal growth.

"I would question whether a J.P. Morgan or a Morgan Stanley would even need to buy a Fleming," said Susan Roth, a senior analyst at Donaldson, Lufkin & Jenrette. "They already have enough people in Europe."

With such a deal, Chase would follow in the footsteps of Citigroup, which bought the U.K. investment banking business of Schroders PLC, and extend its own use of acquisitions to build its U.S. investment banking business. Chase bought San Francisco growth-company specialist Hambrecht & Quist in December.

Other large U.S. banks with investment-bank practices, such as FleetBoston Financial and Bank of America Corp., are not in as good a position to make acquisitions - and they are unlikely to pursue a company like Fleming. FleetBoston is digesting its merger with BankBoston Corp., and Bank of America has said its deal-making is on hold.

As with Citigroup's deal with Schroders, Fleming would bring Chase up a level in Europe and, perhaps more importantly, in Asia. About half of Fleming operating income comes from its asset-management business, and the firm is also a partner in Hong Kong broker Jardine Fleming.

"Chase would like to grow its asset management business, but the constraint has always been price," said Raphael Soifer, chairman of Soifer Consulting LLC.

In the United States, Fleming manages close to $5 billion alongside joint venture partner Rowe Price-Fleming International, which manages over $32 billion for U.S. investors.

Though Hambrecht provided Chase entry into the fast-growing field of high-tech equities underwriting, observers at the time of the acquisition questioned whether Chase would be able to build a global investment bank without a full-fledged European equities business.

Hambrecht in 1998 sold its Parisian investment banking business and consolidated its European investment banking in London.

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