DealZone

Buoyed by the busiest August in more than a decade, global mergers and acquisitions have risen 21 percent so far this year, but the outlook for the rest of the year remains cautious. Reuters takes a look at the deal flow in the third quarter, who the top advisors are and why. *Full Coverage

Brazil’s federal government increased its total stake in oil company Petrobras to about 48 percent from 40 percent after a massive stock offering. U.S.-traded shares of the company fell 0.7 percent in early trading. *View article

Britain’s markets watchdog told investment banks to adopt “a much stricter culture” to prevent leaks to journalists about takeovers and other deals, and said it might impose new rules if nothing improves in a year. *View article

“The initial public stock offering by General Motors will be smaller than previously suggested, and the federal government will most likely sell a relatively small portion of its 61-percent stake in the company, according to people with knowledge of the preparations,”  The New York Times reports. *View NYT article

As regulators mull over BHP Billiton’s bid for Potash, China’s Sinochem has hired banks to advise it on how to foil the deal, two sources told Reuters. *View article *View article on the politics of the deal

The New York Times takes a look at vulture investor Randall D. Smith as he circles the newspaper industry. *View NYT article

Tech companies are flush with cash and on the hunt for growth, reports Forbes. Here are some deal predictions in the sector. *View Forbes article

BHP Billiton’s $39 billion battle to take control of Potash is expected to drag on into next year after it failed to win immediate backing from Canadian authorities.

“To some extent the longer it drags on, it might be better for BHP because it reduces the tension, although if someone else comes in like the Chinese it is another game,” said Peter Chilton, an analyst at Constellation Capital Management. *View article *View article on the possibility of a counter bid

“In the fast-paced world of Silicon Valley innovation, Google’s chief dealmaker David Lawee puts many a youthful engineer to shame,” writes Alexei Oreskovic. *View article

IBM said it would buy data analytics company Netezza for $1.7 billion. The move comes as IBM is shifting its focus from increasingly commoditized computer hardware to higher-margin software and services, particularly analytics. *View article *View additional article on IBM from WSJ

Face-recognition software maker L-1 Identity Solutions is being sold to two of Europe’s top defense firms, Safran and BAE. The use of biometrics is spreading quickly due to growing security fears. However, privacy concerns have posed a barrier to their adoption in some markets. *View article

In the digital mapping and navigation sector, options for would-be buyers are rapidly narrowing, fueled by a growing appetite for location-based services, writes Harro ten Wolde and Tarmo Virki. *View article

Johnson & Johnson, looking to catapult itself into the global vaccine market, is in talks to pay $2.3 billion to buy Dutch biotech Crucell. The potential deal may be more proof it was a question of not if, but rather when other successful biotech companies with late-stage products will be bought. The potential deal also signals that J&J is most likely out of that race for Genzyme.

“The bid price on the remaining shares can be considered as a knock-out price and is substantially higher than the analysts’ consensus target price,” one analyst said. *View article*

Speaking of Genzyme, one of the keys to a successful bid for the biotech company may lie with the heavyweights on the board of Sanofi. The French based pharmaceutical group, which has just lost its flamboyant, long-standing chairman, is dominated by representatives of top shareholders Total and L’Oreal , but is also brimming with pharma experts brought in via acquisitions.

Asian bourses are bracing for more insurance IPOs over the next year, after AIA’s expected record offer next month, with regulatory changes and higher capital requirements forcing companies to tap stock markets.

“This is going to be the age of IPOs. There is more to come in Korea, China and India as well,” one banker said. *View article * View article on NAB pulling out of AXA unit bid *View WSJ article on AIG’s expedited plans to pay back taxpayers

The share price of Sohu.com, China’s No.2 online portal, is too low for the company to consider putting itself up for sale, its chief executive said amid a 15 percent jump in its shares over the past month on buyout rumors. *View article

New capital rules set by global regulators brought relief to the world’s banks on Monday, giving weaker lenders time to raise funds and freeing the strong to lift dividends or hit the acquisition trail. *View article *View Basel III factbox *View analysis on the impact

Marking HP’s second major deal since the departure of Mark Hurd as chief executive, the company said it will buy security software firm ArcSight Inc for $1.5 billion in cash. *View article *View reaction from Seeking Alpha

Frozen out of deals for two years by a lack of credit and a stormy economic outlook, buyout firms are now back fighting over assets, keen to spend hundreds of billions of dollars before time runs out and they have to give money back to investors. *View article

Boeing defense chief Dennis Muilenburg startled many this week when he told the Reuters Aerospace and Defense Summit he would not rule out the possibility of a large-scale merger. Is he sending up a trial balloon to gauge the Pentagon’s reaction? *View article *Read more at the Aerospace and Defense Summit

Two of the world’s biggest private equity firms, KKR and TPG, are potentially interested in Foster’s wine business, but they are not currently working on rival bids, sources told Reuters.  Earlier this week Foster’s rejected a $2.5 billion offer for its wine business as too cheap. *View article

The SEC is investigating investment advisory firms that channel investors’ money into hedge funds, the Wall Street Journal reported. *View WSJ article

National Australia Bank’s bid for AXA Asia Pacific has been blocked for a second time. The Australian competition regulator’s decision clears the way for AMP to make another bid for AXA Asia Pacific and that could come as early as Friday, according to an Australian Associated Press report. *View article *View article on NAB’s CEO

Sanofi-Aventis poured cold water on reports it had raised its offer for Genzyme, saying it was sticking to its bid of $18.5 billion. *View article *View article reporting Sanofi may raise bid

Deal making is a  prominent theme at the Aerospace and Defense Summit being held in Washington, D.C. EADS Chief Executive Louis Gallois said the company’s cash position of 9 billion euros gives it room for “reasonable” acquisitions. Northrop Grumman Chief Executive Wes Bush said the defense contractor has no plans to break itself up, and he would not forecast any large-scale mergers for the industry in the near term.*Full coverage of Aerospace and Defense Summit

Foster’s beer business has been getting all the limelight recently but the company has now rejected a private equity offer worth up to $2.5 billion for its wine business. The news raised speculation that suitors for the combined group, which has a market value of about $11 billion, might now step forward. *View article *View article on Foster’s CEO

BA-Iberia has earmarked Asia as a key region for expansion once their own merger solidifies, though restrictions on foreign investment could narrow their range of acquisition targets.*View article

The defense world is bracing for a whirlwind of dealmaking as tighter budgets and new security threats prompt the Pentagon’s large contractors to move resources to cybersecurity and unmanned defense. *View article *View graphic *View full coverage of the Reuters Aerospace and Defense Summit