Updated from 7:41 a.m. EST

Chase Manhattan

(CMB)

, the No. 2 banking group in the U.S., is in preliminary talks to acquire

Robert Fleming Holdings

, the U.K. investment banking and asset management group, the two companies confirmed Thursday.

An agreement would enable the New York-based bank to take over one of the last remaining independent financial groups in the U.K. In January,

Schroders

sold its investment banking business to

Citigroup

(C) - Get Report

, the No. 1 U.S. banking group, for 1.35 billion pounds ($2.13 billion).

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The acquisition would hardly fit Chase's ambition of catapulting itself into the top leagues of the global investment banking world, but it would still give the company a boost in the world of European and Asian equities and mergers and acquisitions. A deal would also follow Chase's December acquisition of

Hambrecht & Quist

, a technology-focused investment bank based in San Francisco.

Chase shares were up 6 1/16, or 7%, to 97 5/8 Thursday afternoon.

Some executives at Chase are thought to be hedging on a final deal with Fleming in the hopes of acquiring a larger party. Meanwhile, Fleming, which has long sought to stay independent, would benefit from Chase's deep pockets and financial muscle when competing for investment banking deals.

The proposed financial terms of the possible deal were not disclosed. But Fleming is estimated to be worth as much as 3 billion pounds, though Chase would likely be seeking to pay much less than that.

The Fleming family holds a 29% stake in the company, and

Jardine Matheson

, the conglomerate, holds 18%.

Chase and Fleming had no further comment on the talks, which were first reported Thursday in

The Financial Times

of London.