Suntory and Kirin consider joining forces to create one of the world’s biggest beer and soft drinks companies, with annual sales of $41 billion. Meanwhile Friends Provident and Venture Production are both fending off unwanted approaches. For all the latest deals news, click here.

And here’s the latest dose of market chatter:

* McGraw-Hill has hired Evercore Partners Inc, a top U.S. merger advisory boutique to sell BusinessWeek magazine, Bloomberg said, citing a person close to the situation.

* Bank of America Corp is trying to avoid paying billions of dollars in fees to U.S. taxpayers for guarantees against losses at Merrill Lynch, saying the rescue agreement was never signed and the funding never used, Bloomberg said, citing people familiar with the matter.

* British Airways is ready to accept close to a 50-50 ownership deal for a merger with Iberia, Spanish newspaper El Economista said, citing sources close to the talks.

* A private equity fund launched by the former chief of India’s ICICI Venture plans to raise about $500 million, the Economic Times newspaper said.

* Microsoft Corp is pitching to five of the world’s biggest advertising companies a deal to buy Razorfish, its digital ad agency, the Wall Street Journal said on Sunday, citing executives familiar with the situation.

* State-owned National Aviation Co of India Ltd (Nacil), which operates Air India, is raising about $1 billion from JPMorgan Chase & Co to fund its fleet expansion programme, Indian newspaper the Mint said.

Neelie Kroes’ campaign to ensure the European Commission’s rules over state aid are respected has remained in a high gear over the last few weeks. Three times the Competition Commissioner has spoken publicly about how restructuring plans for shaky banks bailed out last Autumn should be agreed with the governments of those countries.

This Tuesday she told the British Banker’s Association the truth. Royal Bank of Scotland made the largest ever corporate loss last year and yet was still saved by the government with a massive £20 billion plus rescue injection. One might ask how such an institution, so fundamentally important for the economy, could not be?

Kroes does not dispute that. What she does insist on is that such aid cannot be effectively propping up the bank indefinitely, allowing the balance sheet, and hence the bank’s business, to remain bigger than it should be, if it were not for that aid.

EC rules state that a restructuring plan to set out how this should be rectified must be made within six months of the aid being administered. After a while there is a danger that smaller banks, without aid, will be disadvantaged by their larger protected brethren.

Kroes is clearly losing her patience with the UK Government. The two camps have yet to resolve how Northern Rock will be restored to independence over 15 months after a draft restructuring plan for the UK’s fifth largest mortgage lender was submitted.

It seems as if a similar delay could happen with RBS. However, that could be disastrous for Kroes as the UK government turns its attention to the forthcoming election. RBS is such a significant bank that there is a danger Kroes’ authority will be damaged irreparably if no agreement can be reached on possible divestments.

With Germany she acted decisively agreeing a dramatic restructuring of Commerzbank and WestLB within the EC timetable.

So the next month, before RBS updates on its internal restructuring plans with interim results in early August, will be critical. An announcement on the sale of various RBS Asian businesses, possibly to Standard Chartered and ANZ, is expected imminently.

However, that is unlikely to be sufficient to satisfy Kroes, who wants to see RBS’s dominant domestic position in UK corporate and smaller business banking broken up. Perhaps we will yet see NatWest and the Royal Bank separated. Bringing those brands together was disgraced former chief executive Sir Fred Goodwin’s key deal.

After that Kroes will aim her sights at Ireland and her homeland of the Netherlands. Both states are propping up key lenders there. Kroes is due to visit Ireland for two days on July 16.

Final, first-half M&A data from Thomson Reuters, released earlier on Thursday, filled out the picture painted by preliminary data last week — deal-making has shrunk dramatically, even as investment bankers find solace in a record flurry of bonds and rights issues.

One interesting wrinkle, compared to the earlier numbers, is the inclusion of Xstrata’s unwanted approach for rival miner Anglo American, valued by the number-crunchers at $42.5 billion. That helped propel Goldman Sachs to the global top spot for M&A advice, and boosted several other banks engaged on the deal.

Some other nuggets:

* Compared to the first half of 2008, announced M&A is down 40.2% to $941 billion, the slowest H1 since 2004.

* Geographically, M&A by dollar value is down 49.2% in the U.S., 42.5% in Europe, 28.4% in Asia-Pacific, and 51.2% in emerging markets. Cross-border M&A totalled $287 billion, down 54.5%.

* Buyouts plunged 78.8% to $32.9 billion , the lowest H1 since 1997. They made up just 3.5% of announced transactions, the lowest percentage since H1 2000.

Among the law firms, who are also having a pretty tough time, Linklaters came top for deal advice, outflanking U.S. rival Skadden, Arps.

Magna and GM aim to sign a deal on Opel by July 15, Blackstone plans to establish a Chinese subsidiary, and AIG picks banks to run the $4 billion-plus IPO of its Asian life insurance unit - for all the latest deals news from Reuters, click here.

And in the newspapers (some external links may require subscriptions):

* KazMunaiGas Exploration and Production, the listed arm of Kazakhstan’s national oil company, has $4bn of cash available for acquisitions and hopes to agree deals before the end of the year, its new chief executive told the Financial Times.

* Stephen Pagliuca, one of three parties interested in buying The Boston Globe, is willing to work with the U.S. newspaper’s largest union to structure a buy-out from its owner The New York Times, the Financial Times reported, citing a person familiar with the discussions.

* Handelsbanken, the Swedish bank, has placed over $12.75 billion in an account at the Riksbank in a bid to help the central bank safeguard the financial system, business daily Dagens Industri reported. Reuters story here.

* Saudi Arabia is considering placing a blockbuster order for a further 72 Typhoon fighter jets worth about 5 billion pounds ($8.1 billion) which could provide a huge boost to BAE Systems, the Daily Mail newspaper reported.

* French group Areva is in exclusive talks with U.S. power group Duke Energy to build a new generation nuclear reactor in Ohio, French daily newspaper La Tribune reported, citing no sources. Reuters story here.

* NYSE Euronext, the world’s top exchange operator by the size of its listings, is planning to establish a clearing house for fixed-income investments, the Wall Street Journal reported.

Two chunky bits of M&A research landed this week (both, incidentally, drawing on Thomson Reuters data).

Cass Business School’s recently established M&A Research Centre sounded a note of a caution about the merits of buying floundering companies, even if such deals are initially welcomed by the market.

“Companies who bought distressed or insolvent rivals over the past quarter-century suffered lower returns on equity and underperformed buyers of healthy firms, a study released on Monday showed…

‘Even though acquisitions of distressed firms are viewed as value-enhancing by the market — no doubt driven by low valuations — the integration process of a distressed target proves challenging for many acquirers,’ wrote the authors, led by Scott Moeller.” (Read the full Reuters story here.)

And JPMorgan looked at the changing face of M&A since 1990, drawing some intriguing contrasts between the current malaise and the bursting of the tech, media and telecoms (TMT) bubble at the start of the decade. JPM notes the dotcom years actually saw a larger M&A boom, relative to the size of the world economy, than the credit bubble:

“Looking back at the 1999-2000 peak, M&A as a percentage of GDP reached its upper limit after 7 years of continuous growth and stagnated for 2 years at 10% to finally collapse and return within 2 years to 4%. In contrast, between 2006 and 2007, whilst M&A was at an all time high level, the same ratio found a new upper limit at 8% and followed the same 2 year high-plateau pattern before suddenly collapsing with the credit crisis in 2008.” …

“Based on the hypothesis that the M&A/GDP pattern could repeat itself global activity as % of GDP could reach 3.6%, 3.7% & 4.5% in 2009, 2010 and 2011 respectively, mirroring the upturn of 2002, 2003 and 2004. When matched with IMF GDP forecast for the same years this could mean that M&A activity could return to slow growth as early as this year and next and eventually reach US$2,622bn by 2011.”

The millennial deal bonanza was both more focused and less cross-border than the last one. In ‘99, TMT dealmaking alone accounted for an astonishing 55 percent of overall M&A deal value, whereas deals involving private equity, the darlings of the latest bubble, peaked at 22 percent in 2006.

Also different this time round: acquirers from emerging markets are driving an ever-bigger share of cross-border deals, with 28 percent of overall volume in the year to date.

Pfizer is seeking deals in emerging markets, while Nomura and T&D are among second-round bidders for Citigroup’s Japanese asset management arm. Get all the latest deals news from Reuters here.

And in the newspapers:

Alan Lewis, owner and chairman of overcoat maker Crombie, has made an approach to Aquascutum’s Japanese owner Renown to acquire the label’s British business including its manufacturing operation, the Financial Times reported. (Link may require subscription).

The head of German chemicals company Bayer said debt reduction and securing liquidity was taking precedence over acquisitions during the economic crisis, the Sueddeutsche Zeitung reported. Reuters story here.

E.ON plans to cut up to 9,000 jobs as part of its cost-cutting programme that aims to save 1.5 billion euros ($2.1 billion) by 2011, Die Welt newspaper reported, citing information from trade union Ver.di. Reuters story here.

Ripplewood, the private equity group, is ready to return with a bid for General Motors Europe should the carmaker’s Canadian suitor Magna fail to complete its acquisition, the Times said, without citing its sources.

Barclays Capital is thinking big. As Reuters banking correspondent Steve Slater wrote earlier:

“Barclays Capital, the investment bank arm of Britain’s Barclays Plc (BARC.L), will hire more than 750 staff this year as part of its plan to win leading positions in equities and M&A advisory, a top executive said.

“The bank, which bought the U.S. business of Lehman Brothers in September, is now expanding in Europe and Asia. It is also targeting a top three spot in prime services to take advantage of a retreat by rivals servicing hedge funds, he said.

“Barclays Capital (BarCap) has hired 450 people in equities and plans to hire another 250 by the end of the year, said Jerry del Missier, president of BarCap. It plans to hire about 65 merger and acquisition (M&A) advisers this year, he said.

“It’s certainly our intention to be a leading global player in equities and advisory over the next three years,” del Missier told Reuters in an interview this week.”

Read the full story here. And see an earlier story on two key M&A hires here.

Is now the time to be bulking up in M&A and other kinds of corporate finance advice?

On Monday, Societe Generale trumpeted the hire of a top French dealmaker from JPMorgan — the auspiciously named Thierry d’Argent — and reiterated its big plans for European M&A. Daiwa Securities SMBC agreed to buy mid-market corporate finance house Close Brothers Corporate Finance. Meanwhile Barclays Capital is making lots of equity markets hires, and says it aims to be one of the world’s top full-service investment banks.

As I wrote:

“A clutch of banks with previously limited reach in European takeovers and other corporate advisory work are betting now is a good time to grab market share — before the dealmaking business recovers.

“There are experienced bankers on the job market at bargain prices after the bloodletting of the financial crisis, while others who survived the culls are restless, recruiters say.

“Advisory businesses, like the one Japanese banks bought in Britain on Monday, offer institutions the prospect of lucrative fees and follow-on work without gobbling up precious capital. But the latecomers may find they are chasing a limited pool of deals, competing with both better-established rivals and with newly emboldened boutiques fresh from their own hiring sprees.”

And here’s a sobering thought. The dollar value of European M&A in the year to date is less than 30 percent of the levels reached in the halcyon days of 2007. Read the full story here.