Deals du Jour

Buyout firm Resolution raises its offer for UK insurer Friends Provident to about 2 billion pounds, and the two sides start talks about a possible deal.

The following are M&A related stories reported by Reuters and other media:

Lloyds Banking Group may consider a multi-billion pound share issue as part of a partial withdrawal from the government’s asset protection scheme, according to a report in the Sunday Times.

U.S. power producer Dynegy will sell nine U.S. power plants to its one-time development partner LS Power Associates, the Wall Street Journal says.

Japan’s largest chemicals firm Mitsubishi Chemical is in talks to buy resin maker Mitsubishi Rayon in a deal worth up to $2.1 billion, the Nikkei business daily says.

Financial services firm Edelweiss Capital is in talks with Japanese insurance group Tokio Marine for a possible joint venture in life insurance, a newspaper reported.

Phew! Due diligence done at last

Lloyds’ deal to buy HBOS was sealed in the time it takes to sup a few cocktails with Gordon Brown. But poring through the gung-ho mortgage lender’s books took nine whole months and many thousands of man hours.

Lloyds Banking Group on Wednesday admitted it had finally completed due diligence on HBOS, after agreeing to buy it in a shotgun marriage last September.

“Nine months after agreeing to purchase HBOS, it has finally completed its review of the assets at HBOS. This means … it has completed its due diligence of HBOS,” said Hank Celenti, analyst at Royal Bank of Canada.

Deals du Jour

Australia and New Zealand Banking Group agreed to pay $550 million to buy some Asian units from British lender Royal Bank of Scotland , taking Australia’s fourth largest bank closer to its goal of generating a fifth of its revenue from Asia by 2012, Reuters reported.

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

Miner Xstrata posted a sharp drop in profit as a result of weak metal prices and warned hopes of a quick recovery may be premature, adding it still sought a “merger of equals” with rival Anglo American, Reuters reported. But Xstrata unveiled no new initiatives related to the courtship.

HSBC Holding is in talks to set up a joint venture in China, Vincent Cheng, HSBC executive director and chairman for Asia Pacific told Reuters.

Deals du Jour

Australia and New Zealand Banking Group Ltd will likely clinch a deal this week to buy some Asian assets from British lender Royal Bank of Scotland Group for about $775 million, a source briefed on the situation told Reuters, marking it the Australian bank’s biggest overseas purchase.

In other M&A related stories reported by other media on Monday:

British-based, US-listed cable operator Virgin Media is considering a secondary listing of its shares in London to attract UK-based investors, according to a report in the Times newspaper. Virgin will make an announcement about its decision at its second-quarter results this month, the report said.

The biggest private equity groups are sitting on $400 billion of debt that needs to be repaid over the next five years, putting the future of some of the largest buyouts in doubt, the Financial Times said, citing data from S&P LCD.

A little more conversation, a little more action?

It would be hard to describe July as a banner month for mergers and acquisitions.

Friday’s data from Thomson Reuters shows it was the first month since Sept. 2004 where announced deals totalled less than $100 billion, and the first month in almost six years without a single $5 billion-plus deal. But top executives are starting to talk M&A again, and bankers are starting to lay the groundwork for future deals. As Michael Erman and I wrote earlier:

“Bankers are pointing to early signs of a pick-up in mergers and acquisitions (M&A), with stronger stocks and easier credit conditions helping company bosses regain the confidence to do deals.

Deals du Jour

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.

Santander joins Brazil’s IPO party

Spain’s Santander confirms plans to spin-off 15 percent of its Brazilian business in a flotation potentially worth over $3 billion.

Reuters reported on July 21 that the bank was mulling an initial public offering in the second half of the year, and advisers have been appointed, people familiar with the matter say.

Santander will lead and underwrite the share sale alongside Credit Suisse and Bank of America/Merrill Lynch. Banco Pactual, the Brazilian bank sold by UBS in April, will be a bookrunner on the deal, the sources say.

Deals du Jour

Time Warner Inc (TWX.N), which plans to spin off AOL by the end of the year, said in a filing with the U.S. Securities and Exchange Commission that it paid $283 million for Google Inc’s (GOOG.O) 5 percent stake in AOL.

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

German flagship carrier Deutsche Lufthansa (LHAG.DE) said it has applied with the Austrian Takeover Commission to extend a deadline for a planned deal to acquire Austrian Airlines (AUAV.VI) by a month to Aug. 31. Click here for a Reuters story.

Private equity group CVC Capital Partners was prepared to offer up to 1.5 billion euros ($2.1 billion) for Anheuser-Busch InBev’s (ABI.BR) Central and Eastern European assets, ahead of a Monday deadline, newspaper De Tijd reports. The private equity firm was in talks with 13 banks, including HSBC, Unicredit and Calyon to secure a loan of at least 700 million euros. While TPG Capital was still in the running, KKR had dropped out of the proceedings.

Deals du Jour

Sweden’s Ericsson has won the race for the wireless assets of bankrupt Nortel Networks Corp, paying $1.13 billion for the crown jewels of the on-time Canadian telecom star.

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

Volkswagen (VLKAF.DE) is considering a 4 billion euros ($5.7 billion) capital increase to offset the credit rating impact of its merger with Porsche, Financial Times Deutschland reports.

Commerzbank (CBKG.DE) said it has sold Dresdner Bank (Switzerland) to the Liechtenstein-based LGT Group. LTG said the combined Swiss operations would manage client assets totalling almost 20 billion Swiss francs. Click here for a Reuters story.

Deals du Jour

National Australia Bank is selling new shares to raise up to US$2.25 billion to help it scout for acquisitions, it says. The fundraising will also be used as a buffer against rising bad debts, but the unexpected share sale by Australia’s largest lender will also allow it “to pursue value creating opportunities,” according to its CEO.

Just last month, NAB bought most of British insurer Aviva’s Australian businesses for A$825 million to expand in wealth management.

In other deal news reported by Reuters and other media:

Procter & Gamble is in advanced talks to sell its prescription-drug business with several parties, including specialty drugmaker Warner Chilcott and private equity firm Cerberus Capital Management, the Wall Street Journal reports, citing people familiar with the matter.