Dutch bancassurer ING says it will split itself in two as part of a restructuring deal with the European Commission, transforming itself over the next four years into a smaller Europe-focused bank.

It is also launching a 7.5 billion euro rights issue to pay back 50 percent of its aid from the Dutch state early.

Also in the Netherlands, brewer Heineken has held discussions to buy the brewing operations of Mexican conglomerate Femsa, the Financial Times reports.

In other M&A news:

UK budget retailer Matalan has had offers from private equity firms that could value it at around 1.5 billion pounds, according to several reports.

Indian state-run telecoms firm Bharat Sanchar Nigam (BSNL) regards a $13.7 billion price for a 46 percent stake in Kuwait’s Zain Telecom is expensive, the Business Standard reported, citing the firm’s chairman. For the Reuters story click here.

Lloyds Banking Group’s private equity unit LDC is in talks to acquire legal outsourcing company CPA Global for 400 million pounds ($666 million), the Financial Times reports.

Insurance companies are the focus of many deals pages on Thursday, with Prudential eyeing a listing in Asia, AXA moving to sell a stake in China’s Taikang and Aviva detailing its restructuring now the Delta Lloyd IPO is moving.

Other deal news today includes:

* South Korea’s Korea National Oil Corp (KNOC) has agreed to buy Canada’s Harvest Energy Trust for C$1.8 billion, the Canadian company said.

* Brazilian telecoms company GVT hired the local investment banking units of Credit Suisse and Goldman Sachs to help it respond to takeover attempts by two global rivals.

* Zambia has eight suitors remaining in the hunt to buy Zamtel, Zambia’s fixed-line telephone operator, a source told Reuters.

With just over two months to the end of the year, there is a sense that time is running out for getting deals done in 2009. Many of the long-running deal sagas are coming to a close, or are getting done. Overnight, news emerged that BAA has finally agreed a 1.5 billion pound sale of British airport Gatwick.

Other deal news in the papers on Wednesday include:

* U.S. Bancorp is eyeing FBOP Corp, an owner of eight banks that may be put up for sale by the Federal Deposit Insurance Corp (FDIC), the Wall Street Journal reported on Tuesday, citing people familiar with the situation.

* National Express’s largest shareholder, Spain’s Jorge Cosmen, supports a merger proposal by British bus and rail operator Stagecoach, the Financial Times reported.

The end of the year looks set to be full of news of rights issues and IPOs as share investors are offered a bet on next year’s economic recovery.

The travails of UK transport firm National Express fill many of Tuesday’s business pages, with rivals First Group and Stagecoach both in the frame for a bid, while the debt-laden company finalises plans for a rights issue. For other Reuters stories on deals, click here.

Other stories in Tuesday’s newspapers include:

- Private equity firm Cerberus Capital Management is in advanced preparations to take rifle and ammunition maker Freedom Group Inc public, the Wall Street Journal reports.

- India’s Reliance Capital is entering into a strategic alliance with Japan’s Daiwa Securities to set up an investment banking business in India, the Economic Times reports.

They may be placing smaller bets, but sovereign wealth funds were back with a vengeance in the third quarter.

Global corporate mergers and acquisitions activity involving sovereign wealth funds jumped sixfold to nearly $22 billion in the quarter, with 37 deals completed. Global announced M&A volumes involving state investment vehicles stood at $21.8 billion, up from $3.6 billion in the second quarter, according to our data.

The number of deals more than doubled from 17 in the April-June period. Only two weeks into the fourth quarter, there were five pending or completed deals with a combined value of $164.7 million. At the height of the boom in the first quarter of 2006, sovereign wealth funds sealed 35 deals worth $45.7 billion.

Managers at sovereign wealth funds — those who have kept their jobs — probably feel they have a lot to make up for, having lost most of some $80 billion they poured into banking shares before the peak of the crisis.

In an October 11 research note titled “Castles in the Air, Downgrading to Perform,” Oppenheimer & Co analyst Ittai Kidron throws cold water on expectations that Brocade will be bought anytime soon.

The speculation began last week, after The Wall Street Journal reported that Brocade was “quietly” shopping itself, and that Oracle and Hewlett-Packard could be potential buyers.

Later, Reuters reported more details: Brocade had in fact been trying to sell itself for several weeks, and HP had kicked the tires — going as far as to begin due diligence — but stopped short of making an offer for the company because they were only interested in certain assets. Then, Oracle CEO Larry Ellison publicly said his company wasn’t about to buy Brocade. Apart from HP and Brocade, analysts have speculated that IBM and Juniper Networks could also be interested.

Oppenheimer’s Kidron explains why Brocade might have trouble finding a buyer:

Brocade’s shares have risen sharply following WSJ reports the company has put itself up for sale. We, however, don’t anticipate a near-term acquisition. We view Brocade’s data center switching as the prime jewel, and it’s unlikely prospective buyers would pay a hefty premium for it solely.

Kidron then lists each potential acquirer and tells you why those companies won’t pick up Brocade. His comments are in quotes:

• HP: “Risks losing substantial revenue given Brocade’s OEM exposure and material overlap with ProCurve. Only needs a data center switch.” In other words, HP might lose the revenue that comes from Brocade’s partnerships with companies that sell its products. Also, HP and Brocade already make some similar gear.
• IBM: “Return to hardware business unlikely.” IBM has transformed itself from a hardware seller to a global services giant and we heard last week that IBM had decided not to look at Brocade’s books, although that could change.
• Oracle: “Publicly denied interest.” Anyway, Oracle is waiting to get regulatory approval from the European Commission to proceed with its acquisition of Sun Microsystems.
• Juniper: “Overlap with Foundry and too big to swallow.” Juniper is the No. 2 maker of network gear after Cisco and buying Brocade would add scale to its business, but would potentially bring integration challenges given Juniper’s size.
• Dell: “A wild card but busy with Perot acquisition ($3.9B), limiting bandwidth.” Dell might agree with that (see below).

Dell’s Vice President of Enterprise Storage and Networking Praveen Asthana stopped by the Reuters office Monday morning, and here’s what he had to say about acquisitions: “We don’t want to overextend ourselves at any time.” Yes, Dell is more acquisitive now than it has ever been, but the PC and server computer maker still wants to focus single-minded on integration and implementation after it has bought a company, so “we wouldn’t want to do three large acquisitions at the same time. The main goal that we have is successful implementation. I’m sure we don’t want to add too many big ones at the same time.”

Kidron’s conclusion?

Given the M&A hurdles and premium Brocade is likely to demand, we’re doubtful of a deal near term. As such, we would take profits at current levels and are downgrading Brocade to Perform.

So far, Brocade shares haven’t reacted much. They were up 0.9 percent at $9.50 in early afternoon Nasdaq trading. Clearly, the market is still holding out hopes of a deal for Brocade, whose shares have risen about 24 percent since before news of its potential sale.

(Additional reporting by Ritsuko Ando. And yes, that’s a picture of a model wearing a brocade gown, courtesy Reuters. Because it makes for a better picture than networking gear.)

French food group Danone has agreed to sell its 51 percent stake in its joint ventures with China’s Wahaha group, putting an end to legal proceedings related to the disputes between the two. In 2007, Danone accused Wahaha of illegally setting up parallel business outside their ventures. 

McGraw-Hill Cos is leaning toward selling its money-losing BusinessWeek magazine to Bloomberg LP, a person familiar with the matter tells Reuters. Bloomberg Markets, a financial news magazine that produces feature stories, and the 80-year-old BusinessWeek could be blended to make a title that would expand Bloomberg’s presence beyond its financial data clients and reach a mainstream audience.

For more on these stories and the rest of the latest deals news from Reuters, click here .

In M&A news from Wednesday’s newspapers:

Russian state bank VEB may get a stake in the troubled carmaker AvtoVAZ (AVAZ.MM) by acquiring an issue of its infrastructure bonds and converting them into equity, Kommersant business daily reports.

U.S. investment company Starwood Capital  is attempting to gain control of lodging chain Extended Stay Inc, the Wall Street Journal reports, citing people familiar with the matter.

Private equity firms Carlyle Group and 3i (III.L) are among those holding preliminary discussions to take a minority stake in India’s Strides Arcolab’s (STAR.BO) injectables business, the Economic Times reported, citing banking sources.

I was rather surprised yesterday to see an e-mail from Ogilvy PR pitching an interview with Dave Booth, the Chairman President of Global Sales and Marketing at Computer Sciences Corp, only a couple of hours after Xerox announced its $6.4 billion planned purchase of Affiliated Computer Services.

After all, CSC -- an IT services company that competes with ACS, and has a market value of $8.1 billion -- was the first company that came to bankers' and analysts' minds when I asked them who else could be in play, as tech companies look to buy into new growth opportunities.

Given how market sentiment works, any comments from the chief senior executive of a potential acquisition target like CSC could easily move the stock. As a rule, that's why, companies typically don't comment on rumor or speculation about themselves. So naturally, an on-the-record interview with the CSC chairman executive wasn't something I could pass up.

The e-mail offered:

...(T)he opportunity to hear comments from Computer Sciences Corp. (CSC). As you might know, CSC is a marketplace contrarian that can offer a POV on the other side of the coin - staying independent.
CSC anticipates greater interest from those clients that value the objectivity of a technology-independent approach. With one less independent firm in the marketplace, CSC's position is strengthened as a global, technology-independent option for clients.

I let Ogilvy know of my interest, and waited, and followed up, and waited. By the late afternoon, I figured the pitch was too good to be true because CSC had thought the better of it. Sure enough, the e-mail that eventually turned up in my inbox, said: "CSC now prefers not to comment."

Wonder if that was a PR learning experience.

(Photo: CSC.com)

Update: A CSC spokesman called on Tuesday to say Dave Booth is not chairman, but president of global sales and marketing at CSC. I have updated this post to include the correct title.

Xerox Corp says it plans to buy Affiliated Computer Services Inc for $5.5 billion to  expand from a document-management company into the outsourcing business. ACS would be the first big deal for new CEO Ursula Burns.

Taiwan says it will allow contract chipmakers and flat-panel firms to acquire rivals in China, a move analysts said will help cement TSMC and UMC’s lead in the semiconductor sector.

For more on these stories and the rest of the latest deals news from Reuters, click here.

And here’s the buzz from Tuesday’s newspapers:

* The Netherlands is looking into options to sell Fortis Bank Nederland assets to French bank BNP Paribas (BNPP.PA) to get approval for a merger of nationalised banks ABN AMRO and Fortis Bank Nederland, Dutch newspaper Het Financieele Dagblad reported.

* UBS  (UBS.N) (UBSN.VX) chief executive Oswald Gruebel said the bank’s U.S. wealth management unit Paine Webber is “non-core” but the Swiss bank will not sell at present, the Financial Times quoted him as saying.

* Barclays (BARC.L) has entered discussions to buy the banking arm of Standard Life (SL.L), The Times reported. Standard Life is in talks with several parties, but Barclays is believed to be the most likely bidder in a deal which could be valued at between 200 million pounds ($317.6 million) and 300 million, the paper said.

Belgium’s Solvay is selling its drugs unit to U.S. partner Abbott Laboratories for 4.5 billion euros ($6.6 billion) in cash and reinvest in chemicals and plastics. Sources familiar with the deal have earlier told Reuters Abbott had agreed to buy the unit to bloster its flagging prescription drug business.

Australia’s biggest department store chain Myer plans to raise up to $2 billion in a share offering that will test investor appetite for retail stocks.

In M&A news reported by Reuters and elsewhere on Monday: 

* A Saudi prince is set to spend up to 350 million pounds ($558 million) to buy a 50 percent stake in English soccer club Liverpool, al-Riyadh newspaper quoted him as saying on Sunday. 

* Kraft Foods Inc (KFT.N) is poised to launch a hostile bid for Cadbury  (CBRY.L) valuing the British confectionery business at around 11 billion pounds ($17.6 billion), a report in The Observer newspaper says. 

* Italian cable maker Prysmian (PRY.MI) has 1 billion euros ($1.5 billion) in liquidity to fund growth and is eying acquisitions in high-growth areas such as Russia, the company’s chief executive told Sunday’s Il Sole 24 Ore. 

* Russia’s Rusal, the world’s top aluminium producer controlled by Russian businessman Oleg Deripaska, is ready to file a prospectus for a Hong Kong listing, which will value the firm at $30 billion, the Sunday Times said. 

* ENN Solar, the solar cell company controlled by the chairman of Xinao Gas Holdings (2688.HK), could seek a listing in Hong Kong as early as the middle of next year, the South China Morning Post reports.

* Agricultural Bank of China, the only big state lender that has yet to float shares, plans to list only in Shanghai and will not list any shares in Hong Kong, the South China Morning Post reports.