DealZone

Corporate broking relationships are experiencing a shake-up this year as relative newcomers and smaller advisors look to grow by charming disillusioned clients from rivals.

Two fledgling European clearing houses, EMCF and EuroCCP, are in merger talks as they face the prospect of increasing competition from larger rivals, three industry sources with knowledge of the matter said.

India’s Hero Group will buy Honda Motor’s entire 26 percent stake in their Honda motorcycle venture Hero Honda Motors, paving the way for the Japanese firm to focus on its wholly-owned Indian unit.

Teen clothing retailer Aeropostale has hired Barclays Capital as a strategic adviser to shore up its takeover defenses in the event it got an approach from private equity firms, the New York Post reported.

The NYT’s “Deal Professor” weighs in on the Novartis/Alcon and the Dynegy/Icahn deals.

Novartis has wrapped up its long-awaited buyout of the remainder of U.S.-listed Alcon for $12.9 billion, after sweetening its original offer with cash.

Power producer Dynegy agreed to be bought by Icahn Enterprises, a firm controlled by billionaire investor Carl Icahn, for $665 million in cash. The deal comes after Dynegy rejected Blackstone Group’s $602 million bid in November.

General Electric Chief Executive Jeffrey Immelt’s problems have changed an awful lot in the past two years. Worry about a hidden time bomb in its financial arm has been replaced with concerns the company has built up too much cash.

Kraft Foods Inc sweetened its offer for British confectioner Cadbury, lifting the cash component of its $10 billion hostile bid by 60 pence a share. While a sweetened offer was widely expected, less anticipated was a deal by the U.S. food giant to sell its North American Pizza unit to Swiss rival Nestle for $3.7 billion. Nestle has since ruled itself out of the race for Cadbury, ending speculation about one potential rival bidder.

Nestle had fanned the flames of speculation with a deal to sell its majority stake in eye care firm Alcon to minority partner Novartis, but it’s now clear the money is not destined for Cadbury shareholders.

French oil company Total signed a $2.25 billion deal to take a 25 percent stake in Chesapeake Energy’s Barnett Shale gas fields in north Texas, following similar investments by U.S. and European rivals in North American shale gas.

The Novartis deal to buy Alcon from Nestle wasn’t a surprise, but $39 billion does grab your attention. Add in minority shareholders potentially getting a raw deal and wrap it all up with the question of what Nestle does with the proceeds and it makes the top story of the day. A Nestle share buyback is in the works but is the company eyeing Cadbury? Questions abound.

The Reuters wrap up of the deal is here. A WSJ blog makes the case that Nestle now has the cash and incentive for a Cadbury bid, but a Bloomberg story pours cold water on the idea.

“Publicly Nestlé has said there are no big deals on the horizon but that it might do bolt-on acquisitions. So they wouldn’t be interested in the whole of Cadbury, but it is plausible that they could do a consortium bid – with Hershey taking the chocolate business and Nestlé taking the chewing gum and candy,” Warren Ackerman, an analyst at Evolution Securities, tells The Guardian.

Swiss drugmaker Novartis is, as expected, exercising an option to buy a 52 percent stake in world-leading eye care firm Alcon from Nestle. It is paying $28.1 billion for Nestle’s stake, bringing its holding to 77 percent, and aims to buy out the remaining 23 percent of the company held by minority shareholders for $11.2 billion. What’s raising eyebrows is the offer of 2.80 Novartis shares for each remaining Alcon share, which amounts to just $153 per share compared with the $180 agreed with Nestle.

Novartis already owns CIBA Vision, the contact lens business, and is ogling an enlarged eye care business with pro-forma 2008 net sales of $8.5 billion. Analysts say it will ultimately need to offer minority shareholders more to get them on board.

What might be more eye-catching in this deal is what it could mean for another one. All cashed up, might Nestle – better known for KitKats than contact lenses – wade into the Cadbury deal, giving suitor Kraft’s bid some serious competition?

The New Year starts with a massive — though widely expected — deal as Novartis (NOVN.VX) says it plans to buy the rest of eye-care group Alcon (ALC.N) for almost $40 billion. The seller is Swiss food group Nestle, which as it happens is sometimes mooted as a rival for  Kraft’s (KFT.N) hostile 10 billion pound bid for Cadbury (CBRY.L). The British chocolate maker’s shares nudge up 4 pence to above 800 pence after media reports that Kraft is set to raise its offer. But markets were expecting a higher bid anyway.

And shares in Japan Airlines Corp (JALSF.PK) jump 31 percent as the country’s government looks to secure funds to prevent the carrier from running out of cash.

For more on these and other deal-related stories from Reuters, click here.

In other media:

National Australia Bank (NAB.AX) is gearing up for a takeover of nationalised British lender Northern Rock (NRKx.L) and has held a “beauty parade” of potential advisers on the deal, British newspaper The Observer reports.

Attention cats and dogs: this deal affects you. 

Germany’s Boehringer Ingelheim is now the front-runner to buy certain animal health assets of Fort Dodge, which makes drugs like ProMeris, ProHeart 6 and the Duramune vaccine line, sources told Reuters. 

The assets are being sold by Wyeth to gain approval for its $68 billion merger with Pfizer. 

Wyeth is not selling its entire Fort Dodge business, just certain assets within the unit that are valued at roughly $400 million to $500 million, the sources said.  

From Acquisitions Monthly

Pfizer, the world’s largest pharmaceuticals company, is lining up Turkey’s largest drugs company, Abdi Ibrahim, for a deal, according to an M&A banking source.

There are no talks so far, and what form a potential tie-up would take is not yet known.

Only last month the president of Pfizer’s emerging markets business unit revealed that the drugs company was considering new acquisitions.

Companies may look cheap in the newly minted bear market, but Dow Chemical isn’t taking any chances with Rohm and Haas. The $18.8 billion deal at $78 per share is a 74 percent premium to the paint specialist’s closing price of $44.83 on Wednesday. If the deal wasn’t rich enough, buy-in from Omaha oracle Warren Buffett and sovereign wealth fund the Kuwait Investment Authority, in the form of convertible preferred securities for $3 billion and $1 billion, respectively, should drown out any naysayers, though it’s tough to imagine who could challenge the deal. CEO Andrew Liveris is keen to move Dow away from basic chemicals and towards higher margin specialty chemicals. Dow said the deal would be “meaningfully accretive” to earnings in the second year after it closes, with pre-tax synergies expected to be at least $800 million per year.

Novartis plans to buy its research partner, Swiss biotech company Speedel, for about $880 million to speed up development of potential blockbuster blood-pressure drug Tekturna. Speedel shares surged more than 90 percent to the offer price after the latest in a string of big pharma acquisitions of promising start-up drug development companies. Cash-rich major drugmakers have been queuing up to invest in medicines to fill their thinning pipelines — and the biotech sector has been hit by the global downturn in equity markets, fuelling takeover speculation. Shares in Novartis, which is keen to shore up its franchise in treating high blood pressure as its top-selling Diovan faces generic competition when it loses exclusivity in 2012, fell slightly as markets viewed the buy as expensive.

Other deals of the day:

* Canada’s Precision Drilling Trust said it will immediately reapproach U.S. oil driller Grey Wolf with its $10-a-share takeover offer if Grey Wolf’s shareholders vote down a proposed merger with Basic Energy Services.

Lehman Brothers is looking for fresh capital in South Korea, the Wall Street Journal reports. If the investment bank does end up tapping South Korea, it will have taken slightly over a decade for the 1997 multibillion loan from the IMF, backed by Wall Street and the Federal Reserve, to come full circle. The Journal says Lehman is looking to state-run Korea Development Bank and Woori Financial Group as it searches for funds to ward off a Bear Stearnsian crisis of confidence. The IMF demanded strict economic reforms for its money. A South Korean lender, like the Chinese and Arab investors bailing out Citi and Merrill Lynch, might just want a juicier cut.

The best part of waking up is Folgers in your cup — with a side of Smuckers jelly. The maker of Jif peanut butter and Crisco oil said it would buy Folgers from Procter & Gamble for stock valued at $2.95 billion plus the assumption of $350 million in debt. J.M. Smucker & Co also acquired Jif and Crisco from P&G.

Yahoo set its annual shareholder meeting for Aug. 1 in the heart of Silicon Valley, as it braced for a proxy showdown with billionaire activist investor Carl Icahn. Earlier, The Wall Street Journal reported that Icahn would seek to remove Jerry Yang as Yahoo chief executive, citing the company’s failure to reach a merger or partnership deal with Microsoft. Icahn had proposed an alternate slate of directors for Yahoo’s board, but until now had not directly targeted Yang. “It’s no longer a mystery to me why Microsoft’s offer isn’t around,” the Journal quoted Icahn as saying. “How can Yahoo keep saying they’re willing to negotiate and sell the company on the one hand, while at the same time they’re completely sabotaging the process without telling anyone?”