“Alitalia in chaos”, reads the headline in Italy’s biggest-selling newspaper, Corriere della Sera. “Flagship Suicide”, says La Repubblica’s editorial. Air France-KLM has abandoned talks with Alitalia’s unions, all but killing the deal just over a week before a general election. The French carrier said it still believed in its takeover plan, which includes 2,100 job cuts. The board is in crisis talks, and a cabinet meeting is also expected to discuss developments after Economy Minister Tommaso Padoa-Schioppa said the alternative to Air France-KLM was emergency administration. “This company is cursed: only an exorcist can save it,” Chairman Maurizio Prato - who has quit - was quoted by the union as saying. Some unions and politicians remain hopeful the airline can avert the stigma of a bankruptcy. Too bad — bankrupcty may not have worked miracles for U.S. airlines, but it has brought them back to life a few times.

Taiwan’s top financial regulator said it has approved a plan by Fubon Financial to buy a stake in the mainland’s Xiamen City Commercial Bank, marking the first such investment between Taiwan and China. Taiwan opened the door in March for local banks to invest in mainland lenders via their offshore subsidiaries, allowing banks to tap the vast China market, where Taiwan investors have poured in more than US$100 billion since the 1980s.

Deals of the Day:
* South Korea’s POSCO said it was weighing up a rise in steel prices and may bid for Daewoo Shipbuilding and Marine, which analysts say could fetch nearly 5 trillion won ($5.1 billion).
* Asciano Group, Australia’s biggest port operator, said it sold its remaining stake in the world’s top pallet supplier Brambles for A$492 million ($452 million), incurring a pretax loss of A$85 million.
* Russia’s former electricity monopoly, Unified Energy Systems, will auction off 21.27 percent of regional utility BashkirEnergo on May 23, it said in a statement.
* Russian billionaire Alisher Usmanov is looking to sell a 19.5 percent stake in Australian miner Mt Gibson Iron Ore in a deal worth up to A$459 million ($421 million), two fund managers who bid for the shares told Reuters.
* ArcelorMittal, the world’s largest steelmaker, said it bought a 50 percent stake in Gonvarri Brasil, which owns steel service facilities for the automotive and industrial sectors.
* South Korean builder POSCO Engineering & Construction, a unit of POSCO, said it had bought 60 percent of unlisted Daewoo Engineering for 216 billion won ($221.7 million).
* Norilsk Nickel sold its 1 percent stake in Polyus Gold for $98.9 million, the metals giant said, as a battle looms for control over Russia’s No. 1 gold miner.
* South Korea’s GS Aromatics has signed a joint investment agreement with China’s Sinopec Corp to co-manage Qingdao Lidong Chemical.