American Express Co. Monday declined to comment on a rumor that it is involved in merger talks with American International Group Inc., an insurance company.

The rumor that the companies were discussing merger plans was first reported in Business Week a week ago. On Sunday, the London Sunday Telegraph fueled the rumor by reporting that the companies were "believed" to be negotiating a deal.

The resulting company would be one of the world's largest, with a combined market value of about $140 billion.

Moshe Orenbuch, an analyst at Sanford C. Bernstein , dismissed the rumor, saying, "AIG doesn't bring much to the card business that Amex couldn't do already."

American Express shares were up 93.57 cents, to $102.8125, in late afternoon trading, despite Monday's selloff in financial stocks.

American International Group recently lost a bidding battle with Cendant Corp. to acquire American Bankers Insurance Group. American Express was said to be negotiating a merger with Citicorp last year.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.