Sprint Nextel’s stock soared 11 percent before the market opened on a British newspaper report that T Mobile parent Deutsche Telekom had appointed Deutsche Bank to advise on a possible run at Sprint, valuing the U.S. cellular carrier at $11 billion.

Sprint certainly is a logical target for any company looking to boost its position in the very busy U.S. mobile market. It announced a large goodwill write-off in February 2008

And Deutsche Telekom is on the make. It signed a deal with France Telecom to combine the companies’ British mobile phone businesses — T-Mobile UK and Orange — last week.

A Sprint deal would make T-Mobile the top U.S. mobile company, but it would cost a bundle … and that’s just the up-front funding. Combining Sprint’s CDMA and T Mobile’s GSM technologies would take technological wizardry no less daunting than the magic the German carrier might have to employ in Washington to ensure a deal clears antitrust and other regulatory hurdles.

So while the hype could last through the day, any near-term excitement about a mega mobile merger could well be tempered by the time your next phone bill arrives.

Deutsche Telekom and France Telecom have confirmed they are talking to combine their UK mobile operations in a JV. And Abu Dhabi’s ATIC has offered to buy Chartered Semiconductor — another sign that M&A is picking up after Kraft/Cadbury?

For all Reuters deals news, click here.

Just one story we picked up from other media today: Chinese machinery maker Tengzhong is still working to close a deal with General Motors Co to buy the U.S. automaker’s Hummer brand after a regulatory setback, Chinese media reported.

As dealmakers everywhere struggle to get deals done, the healthcare industry seals yet another one.

Express Scripts has agreed to buy health insurer WellPoint’s prescription business for $4.68 billion in a significant expansion for the U.S. pharmacy beenfit manager. The deal will be a concoction of cash and up to $1.4 billion in common stock, and will generate more than $1 billion of incremental EBITDA.

This comes on the heels of Pfizer’s $68 billion acquisition of Wyeth, Merck’s $41.1 billion takeover of Schering Plough and Roche Holding’s $46.8 billion buyout of Genentech. Granted, this isn’t a pharma deal, but it still falls under the umbrella of the healthcare sector.

And in a market where deals aren’t getting done — mainly due to tight credit conditions and partly due to value gaps between buyers and sellers (due to the huge declines in stocks late last year) — you’ve gotta ask: what’s the magic pill?

Deals of the day:

* Indian mid-sized IT outsourcer Tech Mahindra won a bidding auction for a majority stake in fraud-hit Satyam Computer Services Ltd, edging out Larsen & Toubro, seen by some analysts as the favourite bidder. 
    
* India’s Larsen & Toubro, which has built up a 12 percent stake in Satyam Computer Services, plans to hold on to the stake, its chief financial officer said on television channel NDTV Profit. 
    
* Pakistan’s Habib Bank Ltd. (HBL) and MCB Bank are interested in buying the operations of Royal Bank of Scotland (RBS) in the South Asian nation, the two banks said in separate statements on Monday. 
    
* A bid by Japan’s Mitsubishi Rayon Co for unlisted British chemicals maker Lucite International has hit a hurdle in China where regulators have delayed the acquisition, two sources briefed on the matter said. 

* Orascom Telecom said on Monday it was proposing to extend the deadline to April 15 for implementing a court order for the Egyptian firm to sell its shares in mobile firm Mobinil to France Telecom.

The Wall Street Journal leads with a piece saying Microsoft is preparing a new bid for Yahoo’s search business that could bring on board media giants Time Warner and News Corp and effectively lead to Yahoo’s breakup. The talks are preliminary and unlikely to result in a deal with Yahoo, the paper said, and although it all seems whimsical, Yahoo shares jumped more than 6 percent in early trade. Yahoo rejected a $47.5 billion takeover offer by Microsoft, and earlier this week questioned whether the software maker was ever serious about a full-scale merger. Carl Icahn, who is running a slate of directors to replace Yahoo’s board and has called for the removal of Chief Executive Jerry Yang, has met with Microsoft, which is encouraging him to press his proxy contest as a way to keep pressure on Yahoo to enter into a deal that would lift its share price, the paper said, citing people familiar with the matter.

British events organizer and publisher Informa said it was considering a 2.15 billion pound ($4.3 billion) bid approach from a consortium of private equity firms, sending its shares 10 percent higher. Informa said in a statement that Providence Equity, The Carlyle Group and Hellman & Friedman had made a bid proposal of 506 pence a share on June 26. “Discussions continue to be at an early stage and there can be no certainty that an offer will be made,” it said. When news emerged last month that the equity firms were working on a bid for the media company, the shares showed only modest gains as analysts questioned whether a deal would succeed in the current tight credit markets.

The markets took down another deal yesterday. Blaming grim market conditions Blockbuster abandoned its $1.3 billion offer to buy electronics retailer Circuit City. Shares of the video rental chain jumped more than 7 percent in extended trade after the news while Circuit City’s shares fell 1.6 percent, after declining nearly 12 percent at Tuesday’s close — hitting their lowest point in two decades. Speculation that a potential deal with Blockbuster would not happen gained ground after Circuit City posted a wider quarterly loss and cut its dividend in June.

France Telecom said it was seeking acquisitions that would be smaller than its failed $40 billion bid for TeliaSonera but declined to comment on a possible cash return to shareholders. France Telecom has repeatedly said it is aiming to make acquisitions in emerging markets in Africa and Asia. After becoming a majority shareholder in Kenya Telecom, the French operator is eyeing stakes in Ghana Telecom, Algerie Telecom and Vietnam’s Mobifone. “The matter is closed and definitely closed,” France Telecom Chief Executive Didier Lombard told a telecoms conference organized by Les Echos newspaper, referring to its failed bid for Nordic operator TeliaSonera. “We will make more modest things in the coming months,” he said.

More deals of the day:

* Biotechnology firm Maxygen said a unit of Germany’s Bayer AG has agreed to buy its hemophilia program assets in a deal valued at $120 million, including a potential milestone payment of $30 million.

* Glenmark Pharmaceuticals has bought seven drug brands in Poland from Iceland’s Actavis and its Polish affiliate Biovena, expanding the Indian firm’s presence in Europe.

* British Airways has agreed to buy small French business airline l’Avion for 68 million euros ($107.3 million) and it will become part of its new OpenSkies unit, they said in a joint statement.

* Auto parts maker Amtek Auto is in preliminary talks to buy German light metal castings maker KSM Castings to consolidate its business in the European market, a source close to the development told Reuters.

* Jiuquan Iron and Steel Group, China’s No. 16 steelmaker, plans to inject assets worth 30 billion yuan ($4.38 billion) into a joint venture with a Kazakhstan iron miner, Jiugang’s listed unit said.

* Diversified manufacturer Johnson Controls said it would form a joint venture to acquire the interior products assets of bankrupt auto parts maker Plastech Engineered Products.

* Chesapeake Energy and Plains Exploration & Production said they have entered into a joint venture in north Louisiana and east Texas.

* Microsoft said it had agreed to buy Powerset, a start-up that is working on a new class of Web search that relies on insights from linguistics rather than simple keyword strings.

You can’t tell the telecom mergers without a scorecard: France Telecom proposed a $41 billion bid for TeliaSonera to create the world’s third-largest broadband operator and fourth-biggest mobile company, but the Nordic company rejected the offer. Britain’s Vodafone said its U.S.-based Verizon Wireless venture with Verizon is in advanced talks to buy U.S. rural mobile service provider Alltel, potentially making it the top U.S. wireless carrier ahead of AT&T. Deutsche Telekom clinched a deal last month with the Greek government that gives it a 25 percent stake in operator OTE, and India’s Reliance Communications and South Africa’s MTN are also close to a tie-up. What is the deal? “In the current context of consolidation, it appears unavoidable to have critical mass,” said France Telecom Chief Executive Didier Lombard.

Verizon’s move in particular was a surprise as it came only seven months after Alltel was loaded up with debt in a private-equity takeover by TPG Capital and Goldman Sachs’ GS Capital Partners. The deal would value Alltel at eight times its earnings before interest, tax, depreciation and amortization, compared with its November sale to private equity firms for about nine times EBITDA, the source said. While TPG and Goldman don’t appear to have made much money, it doesn’t seem they’ve lost much either. It’s hard to imagine they planned to flip it after 6 months, but perhaps for private equity these days, getting out free is good enough.

BHP Billiton, the world’s top miner, said it sees no need to sell assets to win regulatory approval for its $170 billion proposed takeover of rival Rio Tinto, but did not rule out that it might have to. Chief Executive Marius Kloppers also said his company had not held talks with any Chinese entity about buying a stake in BHP. If it had, he added, it would have had to disclose the discussions to the market. BHP will send its takeover offer to Rio shareholders only after it has been cleared by anti-trust regulators in Europe, Australia, the United States, Canada and South Africa, expected later this year. It filed its application to the European Commission, which it considers one of the three key regulators on the bid, on May 30. The EC will say by July 4 whether it will approve the deal, open an in-depth investigation, or permit a short extension.

Other deals of the day:

* Chinese metals trader Sinosteel said it has increased its voting stake in Midwest to 33.82 percent, from 28.37 percent the previous day, as it seeks to take over the Australian iron ore prospector. It has also taken legal steps to stop its rivals buying any more shares in the Australian iron ore prospector.

* Dutch navigation device maker TomTom declared its 2.9 billion euro ($4.5 billion) offer for digital map supplier Tele Atlas unconditional and announced a management reshuffle.

* Pension Corporation, the specialist pension fund manager, has agreed a 451 million pound ($879 million) buyout that will secure the benefits of the pension plan of steel products group Delta, it said.

* French drugmaker Ipsen is to buy the rest of its U.S. partner Tercica for about $404 million and has struck two other deals in a bid to build a $1 billion-a-year U.S. business by 2020.

* Mahindra & Mahindra, India’s top utility vehicle maker, said it had signed an agreement to acquire Italy’s Engines Engineering for an undisclosed sum.

* Indian software firm Tanla Solutions said its Singapore unit will acquire Finland-based mobile payment services firm Openbit in an all-cash deal, valued at $18.6 million.

* Latin American silver and gold miner Hochschild Mining bought 100 percent of the San Felipe project in Mexico for $51.5 million in cash, the firm said.