Deals wrap: M&A not immune to Euro crisis

August 12, 2011

Shadows that started to fall over the pitch books of European dealmakers in the second quarter are darkening, threatening to rob banks of a few billion dollars in potential M&A fees.

After a robust first quarter boosted by mega transactions like Deutsche Telekom’s $39 billion exit from the U.S., fears about stuttering growth and Europe’s mounting debt crisis slowed the rise to only 24 percent in the second quarter, reversing hopes of a robust rebound and several years of rising M&A.

Analysts are pointing toward September as a key time frame if M&A’s have any hope of rebounding, with SABMiller’s  expected renewed assault on Australian bid target Foster’s  coming later this month.

In other news, Bank of America Corp has held exploratory talks with the principal investment funds of Kuwait and Qatar about selling part of its $17 billion stake in China Construction Bank, three sources with direct knowledge of the talks told Reuters.

BofA, the largest U.S. bank by assets, is likely to sell half its stake to shore up its Tier 1 capital, one of the sources said. Analysts believe Bank of America needs about $50 billion to meet new capital requirements.

Finally, from the comes a report that Wal-Mart is exploring a potential acquisition of the Brazilian unit of French retailer Carrefour SA, two years after a previous attempt to strike a deal ended over a disagreement on price.

Investment bank UBS AG is advising Wal-Mart on the possibility of making an offer for Carrefour’s Brazilian stores, which could be valued at between $6 billion and $8 billion, they added

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