British fund manger Schroders said that it was in negotiation to acquire smaller rival Cazenove Capital, a deal that would merge the two oldest names in London.

Schroders confirmed in a regulatory statement that it was planning to offer cash for Cazenove, which is a manager of 18.7 billion pounds in assets.

The acquisition of Cazenove, if completed, would increase Schroder's assets under management by close to 10%. Just last month, Schroders saw a dramatic rise in its assets to 212 billion pounds after it incurred strong inflows in its fourth quarter.

Schroders has until April 19 this year to decide on whether to acquire Cazenove under the merger regulations in the UK.