Update: Dresdner Said to Be in Talks to Buy Wasserstein Perella

Updated from 10:20 a.m. EDT

Dresdner Bank of Germany is in discussions to buy the New York investment bank Wasserstein Perella for as much as $1.5 billion, according to a person close to the banks.

The talks signal that the wave of foreign banks buying up Wall Street investment houses is far from over. In recent months Credit Suisse Group agreed to buy Donaldson Lufkin & Jenrette for over $13 billion, and fellow Swiss bank UBS agreed to buy PaineWebber. Wasserstein Perella acted as an adviser on both deals.

No deal has yet been reached between Dresdner and Wasserstein Perella, according to the person, who declined to give a timetable.

Officials at Dresdner did not comment on the record, and a spokesperson at Wasserstein Perella did not immediately return phone calls.

The deal would give Dresdner, which owns the British investment bank Dresdner Klienwort Benson, a strong hold on the U.S. mergers and acquisitions business. Wasserstein Perella, formed in 1988, ranks fifth among advisers on mergers and acquisition deals in the current year to date, according to Thomson Financial Securities Data.

The firm has become a mergers and acquisitions powerhouse by focusing on a few high-profile deals. For the year to date, Wasserstein Perella has advised on 22 U.S. deals with a total market value of $261.4 billion, according to Thomson Financial Securities Data. This compares to the next biggest M&A adviser, Credit Suisse First Boston, which has advised on 129 U.S. deals worth a combined $214 billion.

In contrast, Dresdner Kleinwort Benson has advised on five U.S. deals worth more than $59 billion, ranking 14th. Worldwide, Dresdner ranks 13th, with 55 deals worth $144.4 billion. In total worldwide deals, Wasserstein Perella ranks seventh with 32 deals worth over $272 billion.

In perhaps its highest profile deal, Wasserstein Perella advised Time Warner (TWX Quote) in its sale to America Online (AOL Quote).

Discussions between the two banks were first reported Tuesday by the Wall Street Journal.