DealZone

M & A wrap: Lifting the Vale

Brazil’s Vale said on Wednesday it has created a new logistics company for cargo transport, but it denied media reports it is planning to sell stock in the unit in a spin-off. Logistics services generated $1.5 billion in revenue in 2010, an increase of 33 percent from the year before.

Cerberus Capital Management LP’s deal to buy 64 hotels from bankrupt Innkeepers USA Trust could still go forward, but at a lower price, two sources familiar with the situation told Reuters.

NYT’s DealBook contributor Steven M. Davidoff writes that Capital One’s proposed $9.2 billion acquisition of ING Direct requires clearance from the Federal Reserve, as it poses a potential systemic risk. “Whether or not the Fed approves the Capital One/ING Direct transaction, it is time for the Fed to run public hearings on what exactly Dodd-Frank means for our banks and what we as a country want from them,” writes Davidoff.

Why IPO when the markets stink? Venture capitalist Jeff Richards’s answer: “You go public in a choppy market because your business has strong fundamentals that investors will buy into regardless, you raise important growth capital, and begin establishing a track record as a public company.”

If private equity firms drafted their NFL dream team, who would make the roster? Fortune.com’s Dan Primack goes deep.

X-raying Xstrata

Xstrata is different from most other major mining companies. Rather than being a long established group with strong links to a particular country, such as Australia for Rio and BHP, South Africa for Anglo American, or Brazil for Vale, it is a relative upstart with few ties to any particular territory, aside from its tax inspired domicile, Switzerland.

The group’s culture might seem innocuous but it is important, particularly when Xstrata has this week proposed a “merger of equals” with South African stalwart Anglo American. Unlike many of its rivals, Xstrata’s raison d’etre is doing deals, led by raucous chief executive Mick Davis.

The company floated in March 2002 with an initial value of £2 billion. Since then, a number of transformational acquisitions such as the $19 billion purchase of Falconbridge, and the recovery in global commodity prices, has meant the group is now valued at £20 billion. At its record high last year, when it tried to buy platinum producer Lonmin, it was worth £67 billion.

Chinalco, Vale hawks circle as Xstrata’s canary swoons

With Anglo having spurned a premium-less bid from Xstrata, the chances of the proposed “mergers of equals” getting done is dimming. The spurned suitor said it was disappointed, but that’s about all it said, so while the possibility of a hostile approach cannot be ruled out, analysts say such a costly alternative is highly unlikely.

Analysts had been reasonably upbeat on Xstrata’s proposal, talking up the merits of a tie-up even as the steel industry shuddered and the government of South Africa, where Anglo has the bulk of its operations, squawked.

But just as investors were dumping their Anglo shares, talk emerged of the possibility of interest from two emerging market heavyweights: China’s Chinalco and Brazil’s Vale. Anglo’s stock quickly steadied.