Strategic mergers could pick up again in the second half of this year, but leveraged buyouts might stay in the doldrums until 2009, according to Merrill Lynch President and Chief Operating Officer Greg Fleming. Fleming told Reuters that conditions in the credit markets have been as tough as he can remember but that things could improve in the next six-to-nine months. Announced global M&A volume is down roughly 25 percent year to date and buy-out volume is down roughly 53 percent, according to data provider Dealogic. “The dialogue exceeds the pipeline today (for deals), but there is hope that as and when the credit markets get better, M&A will pick up reasonably quickly,” said Fleming. “Stock as acquisition currency, for well positioned companies, is back, and you may see more hostile activity,” he said. Private equity deals were likely to be slow through 2008, and he added: “A pick-up in financial sponsor deals is a 2009 event — we have to work through so much inventory.” Fleming also hinted that Merrill Lynch was not planning dramatic job cuts amid the widespread credit crunch.

Chinese aluminium giant Chinalco, which this year led a $14 billion acquisition of 12 percent of Rio Tinto, said in remarks in an influential magazine that it will continue to seek acquisitions abroad. But Chinalco President Xiao Yaqing left the company’s options open regarding its next move on Rio Tinto, the world’s second-biggest mining company, saying it would depend on circumstances. Market speculation has swirled over whether Chinalco — aided by the government or otherwise — might enter into a bidding war against BHP Billiton for Rio. “Rio is our groundbreaking deal in top-tier overseas mergers and acquisitions, but it will not be the last one,” he said.

Buyout firm Terra Firma and French utility Suez are in talks to trump an agreed 1.2 billion pound ($2.4 billion) bid for British waste firm Biffa, according to a person close to the matter. The source said talks were quite advanced but declined to give further details. The Daily Telegraph, without naming its sources, said a joint bid from Terra Firma and Suez could be pitched as high as 380-390 pence a share. Only two weeks ago, Biffa agreed a 350-pence-a-share bid from private equity groups Montagu Funds, General Electric’s Global Infrastructure Partners and UCIL.

Daily Variety, the venerable show business “trade” magazine and Hollywood fixture for over 70 years, has been put up for sale as part of a cost-cutting plan by its parent company, Reed-Elsevier. The Anglo-Dutch company said it would spin off Variety as part of a planned sale of its Reed Business Information publishing unit, which also includes such titles as Publishers Weekly, Broadcasting and Cable and Multichannel News. While Variety is by far the best known brand in Reed’s RBI division, which publishes some 80 U.S. titles alone, company executives indicated they would prefer to sell the unit as a whole, though they did not rule out a separate bid for Variety.