French food group Danone has agreed to sell its 51 percent stake in its joint ventures with China’s Wahaha group, putting an end to legal proceedings related to the disputes between the two. In 2007, Danone accused Wahaha of illegally setting up parallel business outside their ventures. 

McGraw-Hill Cos is leaning toward selling its money-losing BusinessWeek magazine to Bloomberg LP, a person familiar with the matter tells Reuters. Bloomberg Markets, a financial news magazine that produces feature stories, and the 80-year-old BusinessWeek could be blended to make a title that would expand Bloomberg’s presence beyond its financial data clients and reach a mainstream audience.

For more on these stories and the rest of the latest deals news from Reuters, click here .

In M&A news from Wednesday’s newspapers:

Russian state bank VEB may get a stake in the troubled carmaker AvtoVAZ (AVAZ.MM) by acquiring an issue of its infrastructure bonds and converting them into equity, Kommersant business daily reports.

U.S. investment company Starwood Capital  is attempting to gain control of lodging chain Extended Stay Inc, the Wall Street Journal reports, citing people familiar with the matter.

Private equity firms Carlyle Group and 3i (III.L) are among those holding preliminary discussions to take a minority stake in India’s Strides Arcolab’s (STAR.BO) injectables business, the Economic Times reported, citing banking sources.

Ford Motor Co has slowed the sale of its Volvo car unit as it plans to open up the auction to losing bidders for General Motors’ Opel, the Wall Street Journal cited a person close to the company as saying.

In other M&A related stories reported by Reuters and other media on Friday:

Russian mobile network Mobile TeleSystems (MBT.N) is set to pay $1.28 billion, or $5.98 per share, for a 51 percent stake in fixed line carrier Comstar (CMSTq.L), newspaper Kommersant reported.

Low-cost carrier Southwest Airlines is preparing a bid to acquire bankrupt Frontier Airlines for a minimum of $113.6 million, exceeding the $108.8 million bid from Republic Airways Holdings. For the Reuters story, click here.

Chrysler’s private equity owners Cerberus, or at least their lawyers, will arrive at bankruptcy court in Manhattan later this morning. Yesterday, President Obama assured hand-wringing industrialists that the process would be quick and efficient and that Chrysler would emerge a leaner, meaner machine.

To some degree, one can look at the U.S. airline industry in the same light. But that industry, while “saved” through bankruptcy numerous times, is today a shadow of its former self, and remains haunted every so often by the threat of a return to that business mortuary for rebirth.

But a lot has changed since the crisis mad bankruptcy court so busy. The key for the new age of court-run restructuring is to sell major assets before going to court — effectively leaving creditors to haggle over the dregs. Some disgruntled creditors contend that the quick bankruptcy promised by Obama is being engineered in such a way because the sales would never make it past a judge.

In the first major bankruptcy for the auto industry since the crisis began, Obama criticized a handful of “speculators” for greedily holding out for more taxpayer money. He praised union workers for making concessions and financial institutions, led by JPMorgan, for agreeing to take losses up front. He even praised the car company’s management.

But if you look closely, you may start to sympathize with anyone who bought a bond and is being told to settle for less to serve the common good. And to have the management of the company and its bankers praised for effectively engineering a lot of this mess might well make your eyes cross in disbelief.

Deals of the Day:

* Sumitomo Mitsui Financial Group, Japan’s third-largest bank, will buy Citigroup’s Japanese brokerage and key investment banking units in a $5.9 billion deal that will create a banking powerhouse.

* Citi execs are using the sale of its Japanese retail brokerage Nikko Cordial to ease demands from the U.S. stress tests on banks, arguing the sale of non-core assets such as Nikko would strengthen its balance sheet, the Financial Times reported, citing people close to the matter.

* General Motors will talk to the Korea Development Bank (KDB) about selling a stake in GM Daewoo, if that would help the South Korean car-making unit in the long term, a top executive said.

* Australia should veto China’s planned $19.5 billion investment in miner Rio Tinto, Australia’s main opposition Liberal Party said as political opposition to the deal continued to grow.

(PHOTO: The Chrysler logo is reflected in the rear view mirror of a vehicle on the lot at Clark Chrysler Jeep Dodge dealership in Methuen, Massachusetts April 30, 2009. )

With just days left to complete deals to slash labor and debt costs or face bankruptcy, Chrysler has won union concessions aimed at paving the way for a deal with Fiat and the U.S. government to save the privately held automaker. The UAW said that deal must be ratified by Wednesday and meets conditions mandated by the Treasury as part of an emergency loan program for Chrysler. Treasury’s deadline is Thursday.

“The patience, resolve and determination of UAW members in these difficult times is extraordinary, and has made it possible for us to reach the agreement we will present to our membership,” UAW President Ron Gettelfinger said in a statement. The UAW represents about 26,800 Chrysler workers in the United States. The company also has a contract buyout offer on the table for those workers, which expires today. GM is expected to announce a fresh round of cost cutting later this morning.

The U.S. Treasury was expected to make a new debt restructuring offer to Chrysler’s lenders, who are owed $6.9 billion, as soon as today. Attention has shifted back to creditors. Whether they will show patience, resolve and determination remains a question.  Whether doing so will produce a deal is an even bigger one.

Deals of the Day:

* American International Group has received second-round bids from three groups for its aircraft leasing business, valuing the unit at under $5 billion, a source familiar with the matter said.

* Shares of Japan’s Shinsei Bank and Aozora Bank soared after sources said the two money-losing lenders were in merger talks to form Japan’s sixth-largest bank.

* Japanese brewer Kirin agreed a $2.5 billion buy-out of Lion Nathan, Australia’s second-largest beer maker, in a move that could pave way for Kirin to expand further into Asian markets.

* Japan’s Mitsubishi Rayon said it aims to complete its buyout of unlisted British chemicals maker Lucite International by the end of May, saying antitrust authorities worldwide had given the deal the go-ahead.

* HSBC Private Equity and Actis Capital LLP are preparing rival bids for a stake in Franklin Offshore International, sources said, as struggling private equity firm 3i Group Plc seeks to sell its majority stake in the oil services company.

* Poland’s largest bank PKO BP may sell its minority stake in Bank Pocztowy as the state treasury fears a conflict of interest between the two, daily newspaper Gazeta Prawna quoted a state official as saying.

* Anheuser-Busch InBev has picked private equity firm Kohlberg Kravis Roberts & Co (KKR) [KKR.UL] as preferred buyer of South Korea’s Oriental Brewery (OB), a company official said, confirming a report.

* Japan’s NEC Electronics and Renesas Technology said they were in talks to merge next year to create the world’s third-biggest chipmaker after Intel Corp and Samsung Electronics.

(PHOTO: Fiat workers assemble cars at an automobile factory in the southern Italian town of Pomigliano January 30, 2009. REUTERS/Stefano Renna/Agnfoto)

It may be a raucous bit of speculation gone awry, but reports in Italy that Fiat is angling to pick up General Motors’ Opel operations in Europe if the Chrysler deal falls through are too good to dismiss out of hand.

The denial from Fiat’s Chairman, Luca Cordero de Montezemolo, left a little room for intrigue in its dramatic flair. “They’ve written about it in the newspapers? No, no,” he told reporters. Fiat shares raced higher in relief. “Opel is linked to GM and Fiat has already got out of that,” said a Milan dealer, referring to a previous partnership. “Plus, it (Opel) is a clunker. Heaven forbid!”

Meanwhile, over at Chrysler, Chief Executive Bob Nardelli has been telling it like it will be. In an internal memo to staff, he said the company would cede control of its board, and ultimately senior leadership, if it completes the planned Fiat alliance. Given the Fiat deal is for only a fifth of Chrysler initially, rising eventually to 35 percent, that might seem odd. Then again, it’s the U.S. auto sector we’re talking about.

Deals of the day:

* Shares in Zurich Financial Services AG were lower after the company agreed to buy the U.S. auto insurance business of American International Group.

* Communications equipment maker Harris Corp said it agreed to buy Tyco Electronics Ltd’s wireless systems business for $675 million in cash, expanding its presence in the $9 billion market for land mobile radio systems.

* The German government’s 1.39 euro per share offer for stricken investment bank and property lender Hypo Real Estate (HRE) will run until May 4, the SoFFin financial sector rescue fund.

* British life insurer Chesnara said it had agreed to buy Swedish rival Moderna Life, and that it was on the lookout for further acquisitions in the financial services sector.

* An $87.6 million bid by a joint venture of investors Hilco Consumer Capital and Gordon Brothers Brands won the auction for the assets of bankrupt camera maker Polaroid, a federal bankruptcy judge ruled.

Christopher Kaufman; DealZone Editor

(PHOTO: A worker sweeps next to a car made from lemons and oranges during the lemon festival in Menton, southern France, February 12, 2009. REUTERS/Eric Gaillard)

Almost on cue, with an end-March restructuring plan deadline looming, reports of General Motors’ impending demise are bubbling up from the slush of a winter’s economic meltdown. The Wall Street Journal reports GM is looking to take back big chunks of bankrupt parts supplier Delphi, which it spun off a decade ago. The move would make GM bigger just when it is busy right-sizing. Is it taking aim at gaining that exalted Too Big To Fail status that has saved so many banks?

Meanwhile, Bloomberg has an analytical piece suggesting the U.S. government will insist on bankruptcy at GM and Chrysler, engineered to put taxpayer money above other claims. Whatever the case, it is clear the fate of the automakers is again the subject of much debate in the Oval Office. Turnaround plans from GM and privately held Chrysler are expected before the end of the month, and the White House says no decisions are expected before then.

The Obama administration confirmed our reporting that it had hired two law firms to assist Treasury Department officials on auto restructuring matters, lending some credibility to the bankruptcy argument. Lawyers tend to hover and hop around with vulture-like efficiency when talk of bankruptcy funding gathers momentum.

GM and Chrysler have until March 31 to demonstrate to the government that they can be commercially viable. Both told policymakers in December that they faced possible near-term collapse without aid. While the White House talks with lawyers, there is still no sign of a much-talked-about car “czar” to provide a little incentive for revolution.

Deals of the Day:

* Australasian brewer Lion Nathan said it had abandoned its around A$7.3 billion bid for soft drinks maker Coca-Cola Amatil after talks between major shareholders in the two companies broke down.

* Britain’s BG Group offered A$796 million ($538 million) for Australia’s Pure Energy, trumping Arrow Energy, but analysts were unsure whether a bid battle loomed in the chase for assets in Australia’s coal seam gas sector.

* Satellite mogul Charles Ergen made an unsolicited offer late last year to take control of Sirius XM Radio, and was rebuffed, the Wall Street Journal said, citing people familiar with the situation.

* British non-life insurer Chaucer said it has received “a number of approaches” that may lead to an offer for the company, in response to speculation in the media.

* India’s UTI Asset Management is close to selling a 26 percent stake for $175-$200 million to one of at least four investors and private equity firms, valuing the firm at 7-8 percent of assets, banking sources said.

* India’s No. 3 software services exporter, Wipro, which has a cash chest of $500 million, is looking for acquisition opportunities, notably in Europe, its chairman and founder told French daily Les Echos.

* UniCredit investors will take up a 500 million euro shortfall left when its biggest shareholder pulled out of plans to raise 3 billion euros ($3.84 billion), the Italian bank and its adviser Mediobanca said.

* French oil group Total , which is seeking a double-digit percentage stake in France’s second EPR nuclear plant, also wants to play an active role in its construction.

* Sweden’s debt office has found a buyer for the investment banking arm of Carnegie which was taken over by the state late last year.

* Global mobile phone companies Vodafone and Hutchison Whampoa will merge their Australian businesses to create a company able to take on the dominant operators, the two firms said.

* Egypt’s state-controlled Housing and Development Banksaid it was considering buying a stake in UAE real estate developer Damac.

(PHOTO: www.cartype.com)

A company in the U.S. auto industry fails — and the government steps in as savior. Yet again. That’s right. Santa visits the automakers this year while the Grinch steals taxpayers’ Christmas.

The Bush administration is buying $5 billion in equity in GMAC – the finance arm owned by GM and Cerberus Capital Management. The Treasury has also offered a new $1 billion loan to GM so the automaker could participate in a rights offering at GMAC.

Yes, this in addition to the recent $17.4 billion emergency loan to save GM and Chrysler from bankruptcy.  In fact, the government already helped GMAC last week, when the Federal Reserve approved the finance company’s application to become a bank-holding company.

But the Fed’s approval was conditional on GMAC raising new capital.

GMAC said it had raised enough capital to satisfy the Fed’s conditions just as the Treasury announcement on Monday.

The Treasury’s generous moves help Cerberus just as much as they help the auto industry. Cerberus bought 51 percent of GMAC in 2006 and 80 percent of Chrylser last year. The private equity firm has been stung by both those investments as U.S. auto sales have plunged to record lows amid a sinking economy following its purchases.

A happy coincidence: Cerberus Chairman John Snow was the Bush administration’s treasury secretary before Henry Paulson.

The GMAC loans, as well as the original $17.4 billion in aid, come from a program within the Troubled Asset Relief Program to make investments directed at the auto industry. A Treasury official told the Wall Street Journal the new program did not have a specific dollar limit. Now there’s a scary thought.

DEALS OF THE DAY

** China’s three leading steel mills agreed to merge into one entity via share swaps which will create the country’s largest listed steelmaker and further speed industry consolidation. 
       
** Suzlon Energy Ltd, the world’s fifth largest wind turbine maker, said it had raised its stake in Germany’s REpower to 73.71 percent by paying Portugal’s Martifer 65 million euros ($91.98 million). 

** Nationwide Mutual Insurance Co will go ahead with the buyout of its unit Nationwide Financial Services Inc at a price struck months before life insurers were hammered by the market turmoil, the Wall Street Journal said. 

** PCCW’s financial advisers said the takeover offer for the company had been raised to HK$4.50 per share from HK$4.20, in a move aimed at prompting minority shareholders’ support for the buyout.

The Detroit Three automakers go to Washington today, armed with fresh restructuring plans they hope will convince federal lawmakers to open the bailout spigot. For General Motors, Ford and Chrysler the stakes couldn’t be higher.

GM has been reviewing its already revamped business plan and may take steps that include dropping or selling off the Pontiac, Saab and Saturn brands. Ford, seen as the strongest bet to survive of the three because of its better cash position, is considering the sale of Volvo. And Chrysler, seen as the most vulnerable of the bunch, finds itself having to spell out the reasons it needs federal funds even though it’s also looking to hook up with foreign automakers.

As IHS Global Insight analyst Aaron Bragman says: “Just as General Motors is too big to fail, Chrysler is too small to survive on its own.”

GM, Ford and Chrysler have all declined to discuss their restructuring plans before submitting them to key lawmakers today.

The cap-in-hand CEOs will be making their cases against a dire background for automakers globally. Consumers, shocked into hiding by the credit crisis, are reluctant to part with cash. Sales have registered double-digit drops in Germany, Europe’s largest car market, and South Africa, Africa’s top economy. U.S. auto sales, due later on Tuesday, are expected to be just as bad. Toyota Motor Corp, the world’s biggest auto manufacturer, has unveiled new production cuts to deal with the slowdown.

The last time the Detroit Three visited Washington to beg for help, they were heavily criticized for flying in on their corporate jets. Not quite the image of a sector under siege. It’s going to be different this time. Ford’s CEO, Alan Mulally, will actually drive to Washington from Detroit. That’s a 500-mile haul. Talk about trying to make an impression.

More Deals of the Day:

** Coca-Cola Co said it had filed an application for anti-trust approval in China for the company’s $2.5 billion bid for top domestic juice maker China Huiyuan Juice Group.

** Singapore Airport Terminal Services (SATS) will pay state investor Temasek up to US$333 million for control of Singapore Food Industries (SFI), and said it was open to making more acquisitions.

** Memory chip maker Numonyx delayed a purchase of a small stake in its Chinese joint venture with Hynix Semiconductor, Hynix said, as chip makers grapple with a major industry downturn and cash shortage.

** The owners of fast-growing Russian lender Ursa Bank and top-30 bank MDM are eyeing a merger that would create Russia’s second largest private bank, Vedomosti reported, quoting members of the banks’ boards.

** Kuwait’s troubled Gulf Bank has received “numerous” merger offers but believes the time is not right for a deal, its chairman said.

** French advertising giant Publicis announced the latest in a series of acquisitions in China as it looks to boost its presence in fast-growing emerging markets.

** Banks that lent money to the core shareholders of Spanish property firm Metrovacesa have taken a 54 percent stake in the company in exchange for debt, the Sanahuja family said in a statement.

** South Korea’s third-largest steel maker Dongkuk Steel Mill said it would ask a government agency to delay sealing Dongkuk’s $321 million offer for a small domestic builder for “at least one year.”

** French utility Electricite de France said it had made commitments to European regulators as part of its proposed 12.5 billion pound ($18.55 billion) takeover of nuclear operator British Energy Group Plc.

** Sierra Wireless Inc said it was launching a friendly 8.50 euros per share offer for Wavecom, topping a hostile 7 euros per share bid by France’s Gemalto .