DealZone

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.

Xerox, which said early Monday morning it will buy Affiliated Computer Services for $6.4 billion, has had its eye on the IT services company for at least two years, but talks only began toward the end of the first quarter of 2009, several people familiar with the matter told Dealzone. Blackstone, which advised Xerox, worked with the company on this over the past 18 months, in addition to making the introductions earlier this year, according to one source.

Talks grew hot and heavy over the summer, especially as the credit market conditions improved, a second source said. Xerox has committed financing of $3 billion for this deal, which is being arranged by JPMorgan, so the deal only began to look like a real possibility once the financing side was sorted out.

ACS, which competes with other technology services providers such as Computer Sciences Corp and Accenture, is an attractive company because of its recurring revenue business model. It’s been an especially alluring target for private equity buyers, with Cerberus having offered to buy it for $62 a share in 2007. Cerberus withdrew its offer citing the credit crunch and ACS management’s refusal to engage with them. TPG was also interested in ACS about five years ago, the second source added.