Turns out Goldman Sachs is a staunch advocate of going organic — when it comes to the money management business.

As Barclays auctioned off its Barclays Global Investors unit this year, Goldman was widely seen as a likely acquirer. That is until Blackrock In under Larry Fink emerged as the buyer with a $13.5 billion deal.

Lots of other money managers are expected to be sold, as the industry consolidates and cash-strapped banks look for valuables to pawn. But Viniar told analysts Goldman’s preference is to grow the business without deals, and appeared to question the very idea of money manager deals.

“If there were an acquisition that made sense financially for us to do, we would certainly consider it,” he said, something he says every three months to calm down excitable analysts. “When we look at the prices of most of the acquisitions, we think that they haven’t made sense in that you’ve had to assume really heroic growth rates that we don’t think are realistic.” 

Jefferies Putnam Lovell recently said it counted 35 management deals in the second quarter, compared with 52 deals a year earlier. Besides the BGI takeover, Aquiline Capital Partners acquired Conning & Co,  JPMorgan Chase bought the remainder of its Highbridge Capital Management hedge fund unit and Woori Finance purchased Credit Suisse’s 30 percent interest in a joint venture.

Yet Viniar notes money management firm deals are tricky, since buyers have to pay a premium for the company and then put up more money to retain star managers. And even as billions of profits come sloshing into Goldman’s coffers, Viniar apparently doesn’t like to part ways with the firm’s cash.

“It has taken a while, but we’ve grown (the asset management business) quite successfully, almost exclusively organically.” he said. “And the high likelihood is that is the way we are going to continue to grow it in the future.”

(Photo: A customer walks past organic products in an organic food chain store in Taipei/Pichi Chuang)

Barclays will look a whole lot healthier after securing $13.5 billion from BlackRock for its crown-jewellish BGI asset-management arm. This is the same Barclays that turned down aid from the British government and bought defunct Lehman Brothers’ U.S. investment banking business in September, giving it that heroic posture of a down-but-not-out, maybe somewhat punch-drunk prize fighter — Britain’s own Rocky Balboa. Now, as far as Chief Executive John Varley is concerned, BGI-less Barclays is one of the best-capitalized banks in the world.

Investors are cheering Barclays on. Its share price has soared more than fivefold in the last three months, after crashing to a 24-year low on fears that it might need taxpayer funds.

The deal makes BlackRock the world’s biggest asset manager. Though the wealthy of the world are hurting in the recession along with the paycheck-to-paycheck crowd, it’s hard to see Barclays staying in the back seat of the lucrative asset-management market for long. Under the cash-and-shares deal, Barclays takes a 19.9 percent stake and two seats on the board of the enlarged group, to be called BlackRock Global Investors (giving the new firm the added bonus of not having to change BGI’s stationery).

Barclays‘ seemingly never-ending effort to get top dollar for its Barclays Global Investors unit appears to be enticing some Middle East money behind the current best bid from U.S. fund manager BlackRock, which is believed to be in the neighborhood of $12 billion.

Barclays said it had received proposals for BGI and iShares from a number of parties, including BlackRock, and was continuing talks. BlackRock confirmed the talks, but both sides said issues remained that could derail a deal. San Francisco-based BGI is the world’s biggest fund manager, with $1.5 trillion in assets under management and would more than double the size of BlackRock.

With Bank of New York Mellon also in the hunt, sources say Barclays may keep a hand in the game after a sale, possibly taking a stake of up to 20 percent in the enlarged asset manager. Media reports say BlackRock may get funding from Middle East investors, possibly including some Barclays shareholders. The Qatar Investment Authority and Adia, the government investment arm of Abu Dhabi, are in talks alongside Kuwait’s KIO to inject $3 billion into BlackRock for a 12 percent stake, the UK’s Sunday Telegraph newspaper said.

In April Barclays agreed to sell iShares, which is part of BGI, to buyout house CVC for $4.4 billion, but a “go shop” clause allows it to seek higher offers until June 18. So even if a deal is struck this week, the BGI sale may continue to dominate headlines for another week and a half.

It looks like Merrill Lynch has made up its mind regarding its house-cleaning priorities. The investment bank is expected to announce on Thursday that it will sell its 20 percent stake in Bloomberg LP back to the news and financial data company for about $4.5 billion, a source familiar with the matter said. No one on either side is talking, but selling the Bloomberg stake could help Merrill Chief Executive John Thain raise capital to make up for write-downs related in part to subprime mortgages. It is not immediately clear what role, if any, New York Mayor and Bloomberg founder Michael Bloomberg (pictured), who still owns about 70 percent of the company, has played in the Merrill transaction. Merrill also owns a substantial stake in money manager BlackRock Inc, but BlackRock, the largest publicly traded asset management company in the United States, said on Thursday that Merrill had decided against selling the stake. Merrill reports earnings later in the day.

Shares in Teva Pharmaceutical Industries fell nearly 1 percent on Thursday after reports it was in talks to buy rival Barr Phamaceuticals for up to $7.5 billion. TheMarker and Globes financial newspapers reported online overnight that Israel-based Teva, the world’s biggest maker of generic drugs, was in talks to buy New Jersey-based Barr in what would be a further consolidation of the generic drugs industry. TheMarker put the price tag at $7.5 billion, citing capital market sources. That would make it Teva’s biggest acquisition, surpassing the $7.4 billion purchase of Ivax two years ago. Globes cited a price of $7 billion to $7.5 billion. Barr has a market value of $5.1 billion.

And it’s starting to get ugly in Europe. Continental Chief Executive Manfred Wennemer withdrew from the public eye on Thursday to plot his defense against an unwanted $18 billion bid from family-owned Schaeffler Group. If Schaeffler succeeds in buying the group, which is three times its size, it would be the first time a German family business has taken over a company listed on the country’s blue-chip DAX index. But Schaeffler’s advances have stirred resentment at Continental’s headquarters in Hanover, sparking a war of words between both sides. On Wednesday, Continental’s Wennemer hit back at the offer, saying it was too low and warning that the predator could ultimately dismantle Continental. Schaeffler, owned by German billionaire Maria-Elisabeth Schaeffler, countered it had no such plans, labeling Wennemer’s tone “incomprehensible”.

More deals of the day:

** UK-based buyout firm Doughty Hanson said it agreed to buy a majority stake in TMF, a management and accounting outsourcing services business, for 750 million euros ($1.2 billion).

** Indonesia’s PT Bumi Resources has acquired a majority stake in Australian-listed Herald Resources Ltd after Herald’s board recommended Bumi’s improved A$563 million ($547 million) bid.

** Swiss insurer Zurich Financial Services said it would buy two Brazilian companies, paying up to $241 million and adding to a string of recent smaller acquisitions. Zurich said it would buy 87.35 percent of Companhia de Seguros Minas Brasil and 100 percent of Minas Brasil Seguradora Vida e Previdencia from Banco Mercantil do Brasil.

** Bank Hapoalim, one of Israel’s largest banks, said it had agreed to acquire 78 percent of Russian mid-sized SDM Bank for $111 million.

** Australian mining contractor Ausdrill Ltd has agreed to buy Taylor Wimpey Plc’s mining division in Ghana for $20 million, expanding its business in Africa, coveted by its suitor Macmahon Holdings Ltd.

** Daiichi Sankyo and Ranbaxy Laboratories said the Japanese drugmaker’s deal to take over the Indian firm was “binding and final”, but the statement failed to halt Ranbaxy shares slide.

** Chinese state-owned trading firm Sinosteel has lifted its stake in Australian iron ore explorer Midwest Corp to 54 percent, with its takeover offer due to close.

** Hudson’s Bay Co, the Canadian retailer whose name is synonymous with the country’s frontier past, was bought by the U.S.-based private equity fund that owns the Lord & Taylor department store chain, one of the oldest names in American retailing.

** Bilfinger Berger, Germany’s second largest builder, has bought U.S. industrial services specialist Tepsco from private investor Churchill Equity, it said.

UBS said it made a huge loan to Blackrock so that the U.S. asset manager could buy $15 billion of distressed assets from the Swiss bank, easing the strain on UBS’s balance sheet, but not freeing it from the risk. This must have been a tough one for UBS’s credit department to swallow. Citigroup took a similar tack to offload subprime assets. UBS said it had provided 75 percent of the funding used by Blackrock to buy the portfolio. Blackrock raised $3.75 billion in equity from investors to pay for the rest of the package, UBS said. UBS’s stock was down about 4 percent, but traders said that was because of concerns the bank may have to increase the size of its rights issue.

Time Warner and Time Warner Cable said their boards agreed to split the companies, giving Time Warner $9.25 billion from a special dividend that it will use towards paying down debt. As part of the deal, Time Warner’s stake in the cable operator rises to 85.2 percent from 84 percent. The Wall Street Journal says Time Warner will slash its $34.6 billion debt load, by two-thirds. Time Warner Cable now has a more hefty debt load, borrowing to pay the dividend.

Dutch office supplier Corporate Express is said to be bolstering its defenses against a hostile Staples bid with a deal to buy French rival Lyreco for 1.4 billion euros ($2.2 billion) that the companies say would make it the biggest office supplier in Europe, but is spooking investors. Corporate Express shares fell almost 9 percent. Lyreco says the combined company would better weather weaker economic conditions and demand. “Volume and size helps in this business,” he told reporters. Staples formally launched its 1.5 billion euro unsolicited bid for Corporate Express on Monday, which the company rejected as too low.

Third Point, a $5.7 billion hedge fund headed by activist Dan Loeb, has recently accumulated a stake of over 5 million shares in Yahoo and is supporting investor Carl Icahn’s proxy battle, a source familiar with the matter said. Meanwhile, Microsoft’s CEO Steve Ballmer, arguably the best source on Microsoft’s intentions, said in Israel, the software giant is not looking to bid to buy all of Yahoo but is in talks about other types of deals with the U.S. No. 2 search engine. “We are not bidding to buy Yahoo,” Ballmer said. “Yet, we are trying to have discussions about deals with Yahoo that might create value, but not a whole acquisition of the company.” A person familiar with the discussions told Reuters earlier this week that Microsoft has made an alternative offer, proposing to buy Yahoo’s search business and take a minority stake in the Web firm.

Insurer Allianz is in talks about the future of its Dresdner Bank unit and sees a real chance for banking consolidation in Germany, its chief executive said in remarks that boosted German bank shares. “Discussions are currently taking place, although these have not yet reached the stage where I should like to report on them today,” Michael Diekmann said in the text of a speech prepared for the group’s annual shareholder meeting. Allianz is splitting Dresdner Bank into two legally separate business segments, one for private and corporate clients and one for its Dresdner Kleinwort investment banking activities, which it aims to complete by the end of the year at the latest. The move, announced earlier this year to prepare Dresdner to play a role in German banking consolidation, has spurred speculation about possible tie-ups among the country’s commercial banks, long hampered by tiny market shares at home that have undermined their ability to compete abroad.

Other deals of the day:

* ArcelorMittal, the world’s top steel maker, is in talks with Australia’s Macarthur Coal after buying a 15 percent stake in the company, setting up a possible bidding war for the A$4.4 billion group and pushing its shares up 14 percent.

* QBE Insurance dropped its A$8.7 billion ($8.4 billion) bid proposal for rival Insurance Australia Group after IAG rejected it as too low, triggering an 8 percent slide in IAG’s shares.

* Funtastic, an Australian toy and homewares distributor, said it had received a bid proposal from a consortium led by private equity group Archer Capital, valuing the group at about A$132.4 million ($127.3 million).

* Venezuela’s leftist government has entered Bolivia’s financial market through the acquisition of micro-lender Prodem, a top official at Prodem said.

* Bank of Nova Scotia said it was expanding its business in Peru by buying all of Grupo Altas Cumbres‘ Peruvian operation, Banco del Trabajo, for an undisclosed sum.

* A group led by U.S. investment firm Aetos Capital is struggling to get funding to buy Japanese property developer Daito Trust Construction, financial sources told Reuters.