LONDON (Dow Jones) - French insurer Axa SA is in talks to acquire the Winterthur insurance business of Credit Suisse Group in an $8 billion deal, according to a published report.

The online edition of the Wall Street Journal, citing a person familiar with the matter, said that Axa last week earned exclusive negotiating rights to buy Winterthur.

Under the deal, Axa would purchase the Winterthur's operations, with Credit Suisse likely retaining some parts of the business, the Journal reported.

Swiss investment bank Credit Suisse had been planning a public float of Winterthur, a unit valued at more than $8 billion, later in June.

Axa (AXA) shares fell 1.1% in Paris midday trading. Credit Suisse (CSR) slipped 0.8% in Zurich .

Analysts for Keefe, Bruyette & Woods said it was not unusual for a bid report to emerge during an IPO process to help the selling shareholder crystallize a good price.

"Given that Axa has probably been in the Winterthur data room in the past and walked away, and given that Credit Suisse intended to retain a substantial share in the quoted Winterthur to benefit from future upside potential, we treat the current press stories with healthy skepticism," the broker said.

However, it added that there are enough positives to a combination to give the story some credibility, particularly if market volatility makes it harder than initially expected for Credit Suisse to achieve its IPO.

Pierre Flabbee, an analyst at Paris -based Kepler Equities, said Axa could only finance such an acquisition through a capital increase.

He noted that Axa had made no major acquisition in the last two years.

"They usually like to buy companies they can turn around. But Winterthur has already done its restructuring, so the current press speculation seems a bit at odds with Axa's usual strategy," Flabbee said.

Spokesmen for Credit Suisse, Axa and Winterthur declined to comment on Monday.

Winterthur, a property, disability and life insurer, merged with Credit Suisse in 1997. Within the investment's bank's results, Winterthur's first-quarter income from continuing operations before taxes rose 21% to about $410 million , while its net income increased 42% to about $290 million . (END) Dow Jones Newswires 06-12-06 0621ET Copyright (c) 2006 Dow Jones & Company, Inc.