Citi is keeping its Mexican banking unit Banamex. Sources told Reuters that Citi sees the Mexican bank as a solid business and has no plans to sell it.

In recent days, analysts and business columnists have speculated that leading businessmen in Mexico could be planning to buy Banamex as Citigroup tries to shed assets.

Telecommunications mogul Carlos Slim, the world’s second wealthiest man, was widely seen as a potential buyer, but his spokesman told Reuters on Friday that he was not in talks to acquire the bank.

Banamex, the second largest bank in Mexico, will reside in Citi’s “good bank,” known as Citicorp. Banamex has both commercial and retail banking operations. Citi declined to comment.

Citigroup’s acquisition of Banamex for $12.5 billion in 2001 was the largest ever in Mexico at the time and was part of a wave of foreign purchases after an economic crisis devastated the bank sector in the mid-1990s.

DEALS OF THE DAY

Fiat’s founding family is weighing a capital increase of about 2 billion euros ($2.58 billion) with an eye to a possible merger with France’s PSA Peugeot Citroen, an Italian daily reported.

Korea Development Bank confirmed the collapse of a planned sale of Daewoo Shipbuilding but said it would consider various ways to put the world’s No. 3 shipmaker up for grabs again.

British software company Autonomy has agreed to buy U.S. group Interwoven for $775 million to boost its access to the worldwide legal and compliance industry.

BIC, the eponymous French maker of pens and lighters, said it was buying a 40 percent stake in India’s Cello Pens for 124 million euros ($160 million), giving it a foothold in the growth market. BIC could raise its stake to 55 percent in 2013, it said.

Troubled British fund manager New Star Asset Management is pushing ahead with restructuring plans, although it was still actively pursuing the sale of the company, it said.

Norwegian shipping magnate John Fredriksen’s trading vehicle Geveran said it had raised its stake in gas shipper BW Gas to 5.3 percent, or 6.54 million shares.

Indian engineering and construction firm Larsen & Toubro Ltd was likely to present a revival plan to the board of fraud-hit Satyam Computer Services, media reports said.

(Photo: REUTERS/Lucas Jackson)

Chrysler’s got $4 billion in emergency aid from the U.S. government and has said it will seek another $3 billion in government loans. And yesterday it agreed to form an alliance with Italy’s Fiat as it looks for the road out of the woods.

(The Fiat deal fine print reportedly makes it conditional on Chrysler’s getting that extra U.S. loan.)

But the troubled auto maker is not letting its economic ails keep it from going to the movies.

Chrysler plans to help underwrite the fourth installment of the “Terminator” movie series, “Terminator Salvation,” where it will place its vehicles in cameo roles. The film is scheduled for release later this year. Financial terms of the sponsorship deal were not disclosed.

“This spring, Terminator 4 comes out and we will be one of the sponsors,” Chrysler director of media Susan Thomson said in a presentation at the Automotive News World Congress. “We have a following with the Terminator movies and we are going to continue with that.”

First released in 1984, “The Terminator” starred now-California Gov. Arnold Schwarzenegger as a cyborg sent from the future to kill a woman whose son would lead a resistance to a worldwide takeover by machines.

DEALS OF THE DAY

Ball bearings maker Schaeffler said it was not reviewing a complete takeover of Continental, an automotive supplier company.

Libertas Capital Group said it has abandoned Avis Energy alliance. Avis Energy has failed to provide any funds and accordingly this agreement has been cancelled, Libertas said.

Britannia Building Society and Co-operative Financial Services said they had agreed to merge, forming what the companies described as a “super-mutual”.

Japan’s Elpida Memory said it was in talks with Taiwanese DRAM makers including Powerchip, ProMOS Technologies and Rexchip, on a possible merger as well as some other options.

(Photo: A scene from the 2003 film “Terminator 3: Rise of the Machines” in an image courtesy of Warner Bros. REUTERS/Handout)

The Fed donned the red suit on Christmas eve for GMAC, giving the troubled auto finance company the nod to become a bank holding company.

The speedy approval should not come as a surprise, given that GMAC lends to consumers and GM depends on the finance company to sell cars — factors that could make its survival seen as key to fixing the economy.

The new status gives the company access to government lending programs and should allow it to continue financing loans for GM cars.

“In light of the unusual and exigent circumstances affecting the financial markets … the board has determined that emergency conditions exist that justify expeditious action on this proposal,” the Fed said in a statement.

The bank holidng status will come at a cost to GMAC’s majority owner Cerberus and minority owner GM: Both must cut their stakes in the company to comply with regulations that prevent many kinds of companies from owning too big a share of a bank.

DEALS OF THE DAY

** Nissin Foods Holdings, Japan’s top instant noodle maker, said it would buy a one-third stake in Russia’s largest instant noodle group Angleside Ltd for about $296 million, making a foray into the fast-growing market.

(Photo credit: Cheryl Ravelo, Reuters)

Cadbury Plc is taking its last steps out of the beverage market.

The maker of Dairy Milk chocolates agreed to sell its Australian beverage business to Japanese brewer Asahi Breweries for 550 million pounds, or $811 million, completing its exit from soft drinks.

In May, the British candy maker spun off its North American beverage business, Dr Pepper Snapple. It has refocused on the resilient confectionery sector with brands such as Trident, Halls cough drops, Roses chocolates and Wispa.

The Australian beverage deal has a little catch, though. Coca-Cola has a right dating back to 1999 under which it has the option until March next year to negotiate to buy the business.

If Coca-Cola doesn’t step up, Cadbury will enter into a binding agreement with Asahi.

DEALS OF THE DAY

** AIG said that it would halt the merger between its two Japanese life insurers, AIG Star Life Insurance and AIG Edison Life Insurance.

** Commonwealth Bank of Australia, the nation’s third biggest lender, will acquire up to A$4 billion ($2.7 billion) of home loans originated by local finance company Wizard.

** AGL Energy, Australia’s top energy retailer, offered A$171 million ($116.4 million) in a friendly bid for coal seam gas producer Sydney Gas to boost its gas reserves.

** British property investment company Carpathian said it was in talks with potential buyers for the sale of the company or sale of certain assets within its portfolio.

** Indonesia’s heavily indebted Bakrie & Brothers said it had found buyers for as much as $725 million of its debt, exchanging part of that sum for shares in its coal mining unit Bumi Resources.

** Hutchison Port Holdings and Greek pharmaceutical group Alapis, highest bidders for Thessaloniki port’s (OLTH) cargo facilities, pulled out of the tender.

(Photo credit: Darren Staples, Reuters)

The 2008 M&A numbers are in and they tell a sad story.

Global merger volume dropped by almost a third and ended five years of deal growth as a lack of available credit, plunging stock markets and a worldwide financial crisis undermined companies’ ability to make acquisitions.

More deals were withdrawn in the year than ever before, with more than 1,100 transactions cancelled compared with just under 800 in 2007, according to Thomson Reuters data.

And the few big deals that did take place, shaped the rankings of merger advisers.

Some think things can only get better.  

“What drove the cancellations was unexpectedly dramatic gyrations in various markets — credit markets, stock markets. That has already happened,” said James Stynes, global chairman of mergers and acquisitions at Deutsche Bank Securities.

“People will strike deals with the knowledge that credit is extraordinarily scarce and the market is very volatile. They will anticipate that, and therefore deals that get struck are more likely to be structured in a way that they take these issues into account,” he said.

DEALS OF THE DAY

** Movie mogul Run Run Shaw plans to buy out his listed unit, Shaw Brothers (Hong Kong) , for $172 million after he failed to sell his stake in the firm, propelling the stock as much as 58 percent higher.

** Russian fertiliser producer Acron said it has acquired a Chinese distribution company for an undisclosed amount in order to expand in the market there.

** San Miguel, Southeast Asia’s largest food and beverage group, said it was close to buying a dominant stake in Philippine oil refiner Petron, its first foray into the petrol business.

** Morgan Stanley’s private equity unit said it invested 1.82 billion rupees ($37.5 million) in unlisted Indian castor oil maker Biotor Industries, to mark its first private equity investment in India.

** Switzerland’s tour operator Kuoni said it had acquired the whole of Cotravel for an undisclosed amount.

(Photo credit: David Gray, Reuters)

Finally, AIG has made its first high-profile asset sale.

The insurer, which clawed its way back from bankruptcy with a lot of help from the government, agreed to sell its Hartford Steam Boiler unit to Munich Re for $742 million.

The deal is notable for several reasons. It is first of the many major divestitures that AIG has been talking about to pay back the government ever since its bailout. It is also some $500 million less than the $1.2 billion that AIG paid for the unit in 2000.

The lower price points to the difficulty the insurer faces in a forced firesale in a tough environment. 

Is it also an indication of what to expect in subsequent asset sales by what was once the world’s largest insurer?  Is the U.S. personal lines business next in line?

DEALS OF THE DAY
** Arrow Energy, an Australian coal seam gas producer, has offered A$673 million ($460 million) for fellow coal seam gas firm Pure Energy Resources Ltd as it looks to boost its reserves. 

** Asciano, Australia’s top rail and ports operator, has received several bids for its coal haulage business, Pacific National Coal, Asciano said in a statement.  

** Pure Wafer received a preliminary indicative offer for the company, and it is also exploring other strategic alternatives, the provider of silicon wafer reclaim services to chipmakers said.  

** German stock exchange operator Deutsche Boerse will pay $10 million to acquire U.S.-based financial news agency Market News International from China’s Xinhua Finance.

** Intercytex said it will issue 7 million new shares to buy stem cell specialist Axordia, which is developing a treatment for age-related blindness.

** Russia’s LUKOIL has agreed with banks on raising a major loan that will allow it to purchase a significant stake in Spanish energy major Repsol, government and industry sources told Reuters.

** Luxembourg’s budget minister has signed a declaration of intent for the sale of the local arm of troubled Icelandic bank Kaupthing to a group of investors from Arab countries, the Luxembourg government said.

** U.S. retailing mammoth Wal-Mart Stores said it launched an all-cash offer to buy Chile’s biggest supermarket chain, D&S, setting itself up to gain a major foothold in one of Latin America’s most competitive retail markets.

(Photo credit: Mike Segar, Reuters)

The lame duck may have some quack in it yet.

When President Bush said on Thursday that his administration would not allow a “disorderly” bankruptcy or collapse of the U.S. automakers — leaving “orderly” bankruptcy on the table — it seems to have spurred on the negotiations between Detroit and the White House. General Motors and Chrysler are now close to securing emergency loans as part of a U.S. government aid package, according to sources familiar with the talks.

The aid package being spearheaded by the White House would demand that both automakers restructure by seeking new concessions from unions and creditors, two people briefed on the talks said. With the automakers and the United Auto Workers both desperate to stave off a Chapter 11 filing, which they say would be disastrous, the White House’s discussion of “orderly bankruptcy” may have kickstarted negotiations that have been dragging on ever since Congress rejected the bailout bill once and for all.

UPDATE: Bush is now due to make an announcement on the auto rescue plan at 9 a.m. Eastern time.

One remaining uncertainty is where an emergency federal bridge loan would leave Chrysler, widely considered the weakest of the big three U.S. automakers.

Chrysler Chief Executive Bob Nardelli said last month the privately held automaker needs both taxpayer-backed loans and an alliance with one or more automakers to survive. More recently, Nardelli has said the automaker could restructure to emerge as a stand-alone competitor, but most analysts are skeptical.

DEALS OF THE DAY
** Panasonic Corp said it would spend at least $4.5 billion to take control of smaller rival Sanyo Electric Co Ltd , creating Japan’s second-largest electronics maker behind Hitachi Ltd.

** Dassault Aviation signed a deal to buy Alcatel-Lucent’s 20.8 percent stake in defence electronics firm Thales for about 1.57 billion euros ($2.26 billion), Dassault and Alcatel said.

** U.S. hedge fund group GLG Partners has agreed to buy the UK fund management business of French bank Societe Generale, the companies said.

** Steelmaker POSCO said it was considering swapping shares in itself for a stake in South Korea’s KB Financial Group, the parent of Kookmin Bank, which needs to sell shares to meet domestic banking rules.

** Kyobo Securities, a medium-sized South Korean brokerage, said its top shareholder Kyobo Life Insurance had decided not to sell a stake in the broker due to worsening financial market conditions.

** Kookmin Bank, a key unit of South Korea’s KB Financial Group, will sell its stake in ING Group’s South Korean unit for 339 billion won ($263.1 million) this month, the parent group said.

** South Korea’s retail-focused Lotte Group has purchased a stake in a small domestic asset manager from Japan’s Sparx Group for 62.9 billion won ($48.8 million), in a move to bolster its financial business.

Each day that goes by without a Detroit bailout, the Dwindling Three get smaller. Chrysler is shutting down production for at least a month, and The Wall Street Journal reports that the company is again negotiating with GM about a merger. GM, which is denying it is talking again with Chrysler, slashed its Q1 production target by 60 percent and said it would temporarily idle about 30 percent of its North American assembly plant volume.

On his way out the door, U.S. President George W. Bush went on Fox News and talked about how seriously he was looking at a bailout, which is shaping up to be one of his last acts as president. Treasury Secretary Hank Paulson, who if nothing else opposes a bailout being funded from the TARP money set aside for banks, is behind the wheel. Moody’s said the chance of an automaker bankruptcy - prepackaged, coupled with government assistance - is now 70 percent.

Would it be cynical to note that each passing day may lower the price of a sector-wide bailout? What started as a request for $35 billion was quickly lopped down to $15 billion and is now widely quoted as somewhere closer to $14 billion.

Deals of the day:

* Goldman Sachs agreed to sell its 29 percent stake in Sanyo Electric after Panasonic slightly sweetened its offer, three financial sources said, clearing the way for a deal worth at least $6.4 billion.

* Lenovo, the world’s No.4 personal computer maker, said it had agreed with Brazil’s biggest computer maker, Positivo Informatica (PI), that an acquisition by Lenovo was not now possible.

* Insurance Australia Group said it had agreed to sell its mass market distribution businesses in the United Kingdom for around A$165 million ($115.2 million).

* The Osaka Securities Exchange, Japan’s second-largest bourse, said it bought a 76 percent stake in smaller rival Jasdaq for 5.3 billion yen ($60.7 million) in a move to consolidate Japan’s smaller bourses.

* French bank BNP Paribas said its plan to buy a stake in Belgium’s Fortis could no longer proceed as planned after a Brussels Court suspended it.

* Cisco Systems has sold 90 million China Communications Services shares at HK$4.36 each for HK$392 million ($50.6 million), trimming its stake in the Chinese firm by nearly half, fund manager sources said.

* French drinks group Pernod Ricard said it had agreed to sell several drinks brands to Arcus Gruppen AS to meet European Commission competition conditions related to its buy of Vin & Sprit AB.

(Photo; Reuters)

It’s nothing like the M&A bonanza of 06 and 07, but after the collapse of 08, the market for mining companies is coming back to life for 09. As Cameron French reports, two recent mining M&A deals show how volatile metals prices and tight credit markets have unearthed some attractive acquisition targets.

HudBay Minerals is buying rival Lundin Mining, which suffered from weak zinc prices, for C$600 million. IamGold agreed to buy small player Orezone for about $140 million. The shares of both target companies had dropped more than 80 percent this year. As a sector, global mining shares are down 40 percent this year, with smaller players bearing the brunt of the decline. The only question now is whether current valuations – considering all this talk of deflation – are still too high.

French reports that the Iamgold deal — which has been welcomed by investors, as opposed to the deeply unpopular Lundin takeover — has been seen as a sign that that point has been reached. “It’s the first one made at these depressed levels. It’s kind of the first out of the gate that got things going again,” said Paolo Lostritto of Wellington West Capital Markets.

With prices relatively stable since late October, several gold players’ stocks, such as NovaGold, Guyana Goldfields and Detour Gold, have begun to glitter.

Deals of the Day:

* Australian grains handler ABB has ended merger talks with rival grain marketer and agribusiness group AWB, saying the two were unable to agree on terms.

* AIM-listed Ascribe said it had agreed to Scroll Bidco’s recommended cash offer, valuing the healthcare IT services company at about 32.9 million pounds ($50.3 million).

* British software company Innovation Group said it had rejected several offer approaches as they were “not at a level acceptable to the majority of the company’s shareholders,” and its shares more than doubled.

* Denmark’s A.P Moller-Maersk said it had sold its 50-percent stake in airline Martinair to Air France unit KLM after EU competition regulators approved the sale.

(Photo: Reuters)

To terminate its $6.5 billion deal to buy Huntsman, Apollo Management’s Hexion Specialty Chemicals had to cough up $1 billion in fees and charges. This follows the long-awaited collapse of the private equity bid for Canada’s BCE last week, which cost buyers C$1.2 billion in break-up charges.

Hexion agreed to buy Huntsman in July 2007. The deal faltered amid the credit crisis. Apollo tried to walk away, citing insolvency concerns about the combined company.

But with a hefty break-up fee in its pocket - almost as much as its diminished $1.4 billion market cap - Huntsman is looking to settle what could be an even bigger score.

Huntsman sued twice over the deal - once in Delaware to force Hexion to go through with it, and once in Texas alleging that Hexion’s bid scared off another potential suitor, Basell.

The Texas suit could feature a big pay-off. Given its record so far is 1-0, and the Lone Star state is known for its plaintiff-friendly juries, Huntsman can be forgiven for looking to the courts for a little confidence. It isn’t getting much from the market. Huntsman shares sank 17 percent in premarket trade Monday.

Deals of the day:

* ArcelorMittal, the world’s largest steelmaker, said it sold part of its stake in German plate mill Dillinger Huette for 777 million euros ($1.03 billion).

* Energy services firm Hunting said it completed the delayed sale of its Canadian oil and gas division for C$1.26 billions ($1 billion) and would step up its search for acquisitions with the proceeds.

* Macquarie Group, Australia’s biggest investment bank, plans to set up a joint venture with China’s Hengtai Securities in a move aimed at boosting its business in the country’s capital markets, a source said.

* Fidelity Investments has put its Indian captive technology offshore unit up for sale and possible suitors include Indian and global outsourcing firms, the Economic Times reported citing two sources involved in the deal.

* British defense company Ultra Electronics has bought Siemens Radmon, a unit of the German engineering group that monitors radiation for the Royal Navy’s nuclear submarine fleet, for about 5 million pounds ($7.5 million).

* Vishal Retail is not considering any stake sale, a senior official said, denying a newspaper report that the discount retailer was in talks to bring in investors.

* Finnish telecom software firm Tecnomen Oyj said it had agreed to buy 96.6 percent of smaller Indian rival Lifetree Convergence Ltd. for 33.2 million euros ($44 million) in cash and shares.

* Seismic survey group CGGVeritas offered to buy all remaining shares in Wavefield Inseis after a bid for its Norwegian rival won acceptance from shareholders with 69.7 percent of stock.

* Sinopec Yizheng Chemical Fibre confirmed it was in talks with UNIFI Asia Holdings about buying a 50 percent stake in Yihua Unifi Fibre Industry Co Ltd.

* Mega Financial, Taiwan’s No.2 state-controlled financial holding firm, is considering reviving its plan to acquire smaller rival Taiwan Business Bank, a finance ministry official said.

* Insurance firms Prudential Financial and MetLife have submitted separate bid proposals for South Korean insurer Kumho Life Insurance, Kumho’s parent group said.