Allianz Group is in talks with Generali to bid for the Italian insurer's French operations, Bloomberg News reported, citing "people familiar with the matter."

A deal would add more than €11 billion in premiums to Allianz's business in France, bringing it closer in size to the top three insurers in the country, the report noted. However, one of the people told Bloomberg News that the German insurer's executives are not sure if a merger would receive regulatory approval.

According to the report, Allianz has €2.5 billion left in its acquisition budget to spend until the end of 2016. Otherwise, the company will have to return the funds to shareholders through a repurchase transaction.