Aberdeen Asset Management is in preliminary talks with Lloyds Banking Group over a sale of Scottish Widows Investment Partnership (Swip), which manages more than £140 billion on behalf of investors.
The deal, which will issue new shares to Lloyds, might end up with a 10% stake in Aberdeen if it is successful.
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The Swip deal is expected to cost between £400 and £500 million for the buyer.
Through the deal, Aberdeen with more than £200 billion of funds under management and a market capitalisation of £5 billion, hopes to increase its scale significantly.
Lloyds has been seeking for a buyer for Swip in a move to raise funds and resume its dividend, which has been suspended since mid-2008.
The Swip sale would be completed next year, while Lloyds is expected to accept a bidder within weeks.
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