DealZone

Motorola said it would split into two separate publicly traded entities, following intense pressure by activist investor Carl Icahn (pictured). The split into a mobile devices business and a broadband and mobility services business is to take place in 2009 and will take the form of a tax-free distribution. The stock rose more than 10 percent on the news in pre-market action. Icahn said on Monday he was suing Motorola to force it to hand over documents related to its money-losing mobile devices business. Icahn has been insistent that shareholders need “extensive access” to Motorola’s books. Whether he’ll call off the dogs now is anyone’s guess.

The $20 billion leveraged buyout of U.S. radio operator Clear Channel Communications is in jeopardy because banks are balking at the financing. A source familiar with the situation says banks appear unwilling to account for any losses on the loans behind the deal, but private equity buyers still want to do a deal. Clear Channel and its private equity pals may go to court to force lenders to complete the leveraged buyout, the New York Times said, citing people briefed on the talks. If it goes off-air, the Clear Channel deal would be among the highest profile of a series of leveraged buyouts to have failed since the credit crisis began last year. Still on the horizon are the $6.1 billion buyout of Penn National Gaming and the $34.1 billion buyout of Canada’s biggest telecom company BCE. BCE said its deal remains on track.

On the strategic side, Brazil’s Vale, the world’s largest iron ore miner, said talks to buy Swiss rival Xstrata had failed and that Vale would look at other potential takeover targets. Xstrata shares, unsurprisingly, tanked on the news. Though Vale’s chief said the $90 billion price tag was the killer, the deal has long been plagued by disagreement over marketing rights. Xstrata’s main shareholder, trading house Glencore International, holds the marketing rights to a large chunk of Xstrata’s output in nickel, copper and other metals. Glencore was looking to expand its rights in the merged company, something that Vale had previously said would be difficult to overcome given Vale’s relationship with its clients.

Banking heavily on being able to take Grand Theft Auto IV game to the bank, Take-Two Interactive Software has recommended shareholders reject a $26-per-share takeover offer from rival video-game publisher Electronic Arts. It kept to its line that it would explore strategic alternatives including a combination with third parties or with EA, or remaining independent. EA took its $2 billion all-cash offer hostile nearly two weeks ago after Take-Two rebuffed the bid, saying it underestimated the strength of Grand Theft Auto, widely expected to be the best-selling video game this year. Take-Two earlier this month forecast quarterly earnings above Wall Street estimates, citing better-than-expected advance orders for “Grand Theft Auto IV”.

JPMorgan Chase executives have told Bear Stearns employees they will integrate the firm’s prime brokerage and global trade processing businesses, the Wall Street Journal reports, citing people familiar with the situation. The newspaper called the moves among the easiest decisions for JPMorgan, which is buying Bear in a transaction now valuing the investment bank at roughly $10.02 per share. The businesses employ about 800 of Bear’s 14,000 employees, the newspaper said.

Morgan Stanley has shelved the sale of its 34.3 percent stake in mainland brokerage China International Capital Corp, the South China Morning Post reports, as offers from bidders came in low. Private equity firms TPG, JC Flowers and Bain Capital had offered to pay $500 million for the stake. Morgan Stanley hoped to get offers around $1 billion, the paper said. Morgan Stanley in Hong Kong declined to comment. CICC also had no comment on the report. Last month, the Wall Street Journal reported that bids had fallen short.

Malaysia’s biggest lender, Maybank, is set to buy Bank Internasional Indonesia for $2.7 billion, gaining a significant foothold in Southeast Asia’s biggest economy. Under criticism by investors for moving too slowly to expand outside its home market, Maybank stunned analysts by saying it would pay $1.5 billion for 56 percent of Indonesia’s sixth-largest lender — a 23 percent premium to Tuesday’s share price. Maybank said it was buying the stake from Singapore state investor Temasek and South Korea’s Kookmin Bank, and that it would spend an additional $1.2 billion to buy the remaining 44 percent of BII from minority shareholders. “This is the highest ever for a banking acquisition in Indonesia,” said Agus Pramono, analyst at DBS Vickers in Jakarta, noting the premium was steep by a number of industry benchmarks.

South Korea says it has started the sale of Daewoo Shipbuilding and Marine Engineering, the world’s No. 3 shipbuilder, by putting up a 50.4 percent stake worth $3.6 billion at current market prices. The long-awaited sale is expected to attract a host of bidders, ranging from steel makers looking to lock in a big buyer of their product to conglomerates seeking investments. Foreign investors may also join local bidders’ consortia, although an outright sale to a foreign shipbuilder is unlikely as Daewoo operates a defense business, analysts said.

Caterpillar, the maker of construction equipment, said it would take a controlling stake in its Japanese joint venture with Mitsubishi Heavy Industries in a bid to add revenue from Asia. The transaction calls for the venture, Shin Caterpillar Mitsubishi Ltd, to redeem half of Mitsubishi Heavy Industries’ shares for about $499 million. Caterpillar would end up with about 67 percent of the venture. Caterpillar said it planned to rename the business Caterpillar Japan when the first phase of the transaction closes, expected in the third quarter.

Elsewhere…

* The boards of Brazil’s BM&F commodities and futures exchange and the Bovespa stock exchange said they had approved the merger of the firms.

*Ford Motor Co is expected to confirm the sale of its British luxury brands Jaguar and Land Rover to India’s Tata Motors for over $2 billion later today.

*Australia’s Perilya bid A$294 million ($270 million) for fellow zinc miner CBH Resources, aiming to unite their ageing mines as they try to diversify to counter a sagging zinc price.

*Power producer NRG Energy said it formed a new company with Japan’s Toshiba to develop and build new nuclear energy projects in North America.

*TV Azteca, Mexico’s second-largest broadcaster, said it bought about 70 percent of Guatemala’s Latitud TV to tap into the broadcast and cable television markets in the small Central American country.

* Procter & Gamble said it was buying high-end hair-care products maker Frederic Fekkai & Co in a move to expand its portfolio in the faster-growing, higher-margin beauty business.

*Irish telecoms billionaire Denis O’Brien has raised his stake in Independent News & Media but traders discounted it as the reason for a 10 percent jump in the newspaper publisher’s Dublin share price.

*CME Group said it is acquiring Credit Market Analysis Ltd, a provider of credit derivatives data, as the exchange looks to bolster its business in the fast-growing market.

*Norwegian shipbuilder Aker Yards will sell 70 percent of three merchant vessel yards to Russian-owned investment firm FLC West for 291.9 million euros ($450 million).

*Enerplus Resources Fund said it may sell its 15 percent stake in Total SA‘s planned C$9 billion ($8.8 billion) Joslyn oil sands project in order to concentrate on its own development in the oil-rich sands of northern Alberta.

* China Shipping Development plans to spend 23 billion yuan ($3.3 billion) to buy 59 vessels over the next five years, more than doubling its capacity to ride an anticipated upswell in global trade, its top executive said.

*Government-run State Bank of India said it had completed an acquisition of 91 percent in an Indian factoring services company for 5.2 billion rupees ($130 million).

*French utilities group Suez said it had shortlisted European power groups EDF, ENI and EON as potential buyers of its majority stake in Belgium’s Distrigas.

*JPMorgan has acquired the carbon offsetting company ClimateCare, the U.S. investment bank said.

*Hochtief says Spain’s ACS does not plan to take over Hochtief, respects its independence.