DealZone

Shadows that started to fall over the pitch books of European dealmakers in the second quarter are darkening, threatening to rob banks of a few billion dollars in potential M&A fees.

After a robust first quarter boosted by mega transactions like Deutsche Telekom’s $39 billion exit from the U.S., fears about stuttering growth and Europe’s mounting debt crisis slowed the rise to only 24 percent in the second quarter, reversing hopes of a robust rebound and several years of rising M&A.

Analysts are pointing toward September as a key time frame if M&A’s have any hope of rebounding, with SABMiller’s  expected renewed assault on Australian bid target Foster’s  coming later this month.

In other news, Bank of America Corp has held exploratory talks with the principal investment funds of Kuwait and Qatar about selling part of its $17 billion stake in China Construction Bank, three sources with direct knowledge of the talks told Reuters.

BofA, the largest U.S. bank by assets, is likely to sell half its stake to shore up its Tier 1 capital, one of the sources said. Analysts believe Bank of America needs about $50 billion to meet new capital requirements.

Nasdaq OMX and Intercontinental Exchange (ICE) said they have lined up a commitment to finance their rival bid for NYSE Euronext and have offered to pay a breakup fee if the deal fails to go through. This article from The Wall Street Journal lists the details of how Nasdaq and ICE is plan to sweeten their offer for the exchange even more.

Samsung Electronics is selling its hard-disk-drive (HDD) business to Seagate Technologies for 1.4 billion in cash and stock as Samsung looks to back out from the industry and focus on its core money-making memory-chip business. The acquisition will help Seagate, the world’s largest maker of hard drives better compete with rival Western Digital, which has plans to buy Hitachi’s HDD unit for $4.3 billion.

Leading corporate governance body PIRC is telling Xstrata shareholders ahead of their board vote they should reject the election of three directors nominated by its top shareholder Glencore because it does not perceive them as independent.  The world’s top commodities trader is in the process of completing a $12.1 billion duel-listing in London and Hong Kong.

Caterpillar plans to buy Bucyrus International for $7.6 billion. The deal would create a global supplier of trucks, hydraulic shovels, blasting drills and coal-mining equipment and mark a step-up in acquisitions by Caterpillar under its new chief executive, Doug Oberhelman.

BHP Billiton scrapped its $39 billion bid for Canada’s Potash Corp and bowed to calls from investors to return cash, a move that came days after regulators blocked the year’s biggest takeover deal.

Australian wealth manager AMP and French insurer AXA SA launched a new $13.1 billion-plus bid for AXA Asia Pacific, a move set to challenge banks’ domination of the world’s fourth-largest wealth market down under.

Wal-Mart may scale back its bid for Massmart and take a 50 percent stake, rather than a full buyout, Massmart said in a statement. Wal-Mart has been under increasing fire from shareholders to revive its ailing U.S. stores, and some analysts have said it should concentrate on fixing its business at home before spending big on expansion. *View article

Private equity firm Blackstone Group reported a rise in quarterly earnings and said the value of its investment funds grew. *View article

With the U.S. car industry in a slow, fragile recovery from a punishing downturn, auto parts makers are reluctant to pull the trigger on deals, delaying a long-predicted wave of consolidation in the sector, write Soyoung Kim and Deepa Seetharaman. *View article

Wal-Mart <WMT.N> has finally sounded the vuvuzela on African expansion. After months of speculation about how it would try to capitalize on the continent's growth, the U.S. retailer is offering $4.2 billion to acquire South Africa's Massmart Holdings <MSMJ.J>. The price could grate on shareholders' ears. But the deal gives Wal-Mart a local vehicle -- and local knowledge -- to help it gain access to a market with a profile that should suit it well.

If the deal is accepted by Massmart, Wal-Mart will be paying close to 13 times the Johannesburg-based retailer's EBITDA. For a company that trades at closer to 7 times, that's a big premium, albeit a drop in the bucket against Wal-Mart's nearly $200 billion market capitalization.

But Wal-Mart will get a foothold in what should be a bright spot in the world's growth map. South Africa, where Massmart operates 232 stores from Limpopo in the northeast to the Western Cape, is one of the CIVETS economies (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) widely hailed as the next sizable emerging markets.

American International Group and the U.S. government are moving closer to a deal on how the Treasury Department would exit its investment in the bailed-out insurer, sources said. *View article *View Bloomberg article

Southwest Airlines will purchase AirTran Holdings for $1.04 billion in cash and stock in a deal that will allow Southwest to expand its presence in major East Coast markets. The move by Southwest puts pressure on all major rivals, who are trying to strengthen their eastern markets to leverage more premium-paying business travel. *View article

Consumer goods group Unilever will buy hair and skin care company Alberto Culver for $3.7 billion in the latest move to rebalance its portfolio toward higher growth lines. Analysts said the price of the deal looked high, but could be justified by cost savings and by skewing Unilever’s business to more high growth, high margin categories. *View article

Check out a different kind of tournament bracket still underway.

The Duke Blue Devils may have won yet another college basketball title Monday night, but consumers can still make their "Sweet 16" picks in Consumerist.com's annual "Worst Company in America"  tournament, which runs through April 26.

In its fifth year, the website, owned by Consumers Union, the publisher of Consumer Reports, lets consumers vote for their least favorite companies in matchups much like the NCAA tournament. Starting with 32 "teams," the tournament pairs companies in votes in which the "winner" (think about it, in a worst company vote you want to lose) advances to face the next competitor.

In the first round this year, Bank of America beat Citibank, GM beat Toyota and in an "upset" Cash4Gold beat defending "champion" AIG. Other companies that advanced included Walmart, Ticketmaster, United Airlines, Best Buy, Apple and Comcast, which has lost in the title game the last two years.