Before Merrill Lynch and red-hot money manager BlackRock agreed to an asset management alliance this week, both firms may have looked to Pittsburgh's Mellon Financial Corp. as a potential partner.

A union with either Wall Street firm might have meant the end of Mellon's Pittsburgh headquarters and the strong likelihood of local job losses, analysts said.

The Wall Street Journal mentioned the talks between BlackRock and Mellon yesterday, reporting that such a deal would have placed BlackRock Chief Executive Officer Lawrence Fink in charge of the combined company.

"Clearly, Larry Fink was not moving to Pittsburgh," said Portland, Maine, banking analyst Gerard Cassidy, who follows Mellon for RBC Capital Markets.

But the talks went nowhere, the newspaper reported, and then Mellon chose a new chief executive officer, Robert Kelly, who started last Monday, coinciding with the abrupt departure of outgoing CEO Martin McGuinn.

PNC, a 70 percent owner of BlackRock, might have known about such discussions. But the Pittsburgh bank declined comment, as did BlackRock, Merrill Lynch and Mellon. BlackRock and Merrill Lynch said it was company policy not to comment on market rumors.

The possibility of talks between Merrill Lynch's asset management division and Mellon first surfaced in published reports last year, with Barron's reporting that Mellon discussed buying the Merrill Lynch division for as much as $7 billion in stock.

In December, Boston hedge fund Highlands Capital Management, a large Mellon shareholder, speculated publicly that the transaction did not proceed because of Mellon's reluctance to have the combined operation run by a Merrill Lynch executive or a reluctance to separate Mellon's asset management business from its securities processing business.

"If this is correct, your shareholders should be outraged that such a transaction was not consummated," Richard Grubman, the hedge fund's managing director, wrote in a Dec. 22 letter to Mr. McGuinn that was made public.

Mellon and Merrill Lynch never confirmed the talks.

It does not surprise analysts to know that Mellon may have been searching for a merger partner and that it may have had discussions with BlackRock, Merrill Lynch or a host of other companies as a way of boosting the company's share performance.

Even Mr. McGuinn acknowledged last October in a conference call that the bank continued to look for mergers and acquisitions as part of its growth strategy and that such a deal could bring in a new CEO along with it.

"We have always believed Mellon, for a number of years, has held informal, possibly somewhat formal, discussions with different merger partners," Mr. Cassidy said. "It doesn't surprise me they held discussions with BlackRock."

Nor does it surprise analysts that BlackRock would have been interested in Mellon -- it remains one of the largest money managers in the world, with more than $730 billion under management.

"I suspect [Mellon executives] were actively talking to BlackRock," said banking analyst Thomas McCrohan of Janney Montgomery Scott in Philadelphia.

But "only one team, only one guy can be in charge," Mr. Cassidy said, and it probably would have been Mr. Fink, the BlackRock CEO. "That may not have been acceptable to the board of Mellon."

The hiring of Mr. Kelly closes the door to a blockbuster deal "in the near to intermediate term," Mr. Cassidy said. A deal with BlackRock is "now an opportunity lost," he said.