Banco Santander Central Hispano and France's Societe Generale are seeking to acquire an asset management company in the United States as part of a strategic alliance announced Tuesday, according to sources familiar with the Spanish bank's plans.

Sources added that in a separate move, Santander plans to step up its distribution of Latin American equities through Santander Investment Securities in New York to strengthen its Latin American capital markets activities.

Executives at Santander in New York did not return calls for comment.

Analysts said a deal in the United States would make sense, given the two companies' respective strengths.

Santander's asset management "is mostly directed to Spain and Latin America, and Paris-based SocGen is mostly French," said Inigo Lecubarri, a banking analyst at Salomon Smith Barney in London. Both companies" need a U.S. piece in order to become a powerhouse," he said.

A SocGen spokeswoman in New York declined to comment on the reports and referred all questions to the headquarters in Paris. She acknowledged that SocGen's asset management operation in the United States is small. SocGen recently folded assets managed by its investment banking unit, SG Cowen, into SG Asset Management, and is separately seeking to divest its retail mutual funds operation.

Santander, which is based in Madrid, slashed its New York staff to around 250, from 600, in 1998 after a global crisis in emerging markets sent sales of Latin American securities plummeting.

Sources said that increased distribution of Santander's Latin American equities will likely result in a minimal staffing increase.

They also noted that Santander's move resembles those by U.S. and foreign banks hoping to improve business in Latin America, and that they reflect a shift in investor interest into Latin American equities and away from bonds.

According to data released this week by the United Nations Conference on Trade and Development, foreign direct investment in Latin America and the Caribbean surged 32% last year, to $97 billion, with Brazil alone accounting for $31 billion worth of investments in the regions.

Reports on interest by Santander and SocGen in buying a U.S. asset management company followed a meeting between analysts and Santander executives in London this week.

In the alliance announced Tuesday, Societe Generale plans to buy a 3% stake in Santander for around $1 billion. Santander, in turn, would buy an additional 1.9% stake in SocGen for $400 million, raising its stake in the French company to 7%.

The two have also agreed to combine banking operations outside Europe in five areas: asset management, retail banking, investment banking, specialty services such as consumer finance, and Internet banking and brokerage.

Although Societe Generale has a large corporate wholesale and capital markets operation in the United States, Santander's New York based branch is used mainly as a platform for Latin research, securities underwriting and distribution.

Outside the United States, Societe Generale has a strong network of offices in Asia and Santander extensive banking operations in Latin America. Last month it acquired Banco Bozano, Simonsen SA, Brazil's only independent investment bank.

Santander and SocGen plan to divide their global operations, with Societe Generale taking over Santander's activities in Asia and Santander representing SocGen through its network of banks across Latin America.

Santander will close its offices in Southeast Asia and only retain desks at Societe Generale branches. SocGen will close its offices in Latin America and attach a limited number of officers to Santander branches.

Sources also speculated that Societe Generale would either transfer its small Argentine retail banking operation to Santander or sell it to a U.S. or European bank.

"Basically," Santander and SocGen are "looking at ways to strengthen their investments in Latin America and Asia while at the same time cutting costs," said Paola Biraschi, a banking analyst at Fox-Pitt, Kelton in London.

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