Swiss bank UBS held talks with Morgan Stanley late last year about a sale of its U.S. brokerage arm -- a unit UBS acquired in 2000 for $11.8 billion formerly known as PaineWebber -- according to a report in the Financial Times Tuesday.

The discussions came as UBS considered options for restructuring its business as it confronts the financial crisis.

The talks were preliminary and were unlikely to be revived, according to FT , quoting a person familiar with the matter.

Recently, UBS agreed to pay Citigroup $2.7 billion for the acquisition of Smith Barney, Citi's brokerage arm.

UBS is not in talks with any other buyers for the unit but is focusing on strengthening it, FT said. The will company give more information about its plans and will report fourth-quarter results on Feb. 10.

Investment Citigroup Sale