Picture this: You're General Motors Corp. (NYSE: GM), and you've fallen on tough times. You've been forced to seek alms from the U.S. government simply to make ends meet. Recently, the Obama administration gave a resounding thumbs-down to your viability plan, and a bankruptcy filing seems increasingly likely. So, how do you try to prove you're still a thriving, relevant corporation? Partner with Segway!

That's right -- in a move that's sure to leave even Steve Wozniak scratching his head, General Motors is teaming up with Segway, Inc., purveyors of the commercially unsuccessful two-wheeled scooter, to create the PUMA (shorthand for Personal Urban Mobility and Accessibility). A prototype of the battery-powered vehicle will hit the streets of Manhattan today, though the PUMA likely won't make its way to the consumer market until 2012.

A piece in the Wall Street Journal [subscription required] discusses Nike's (NYSE: NKE) efforts to move in on Puma's business, and offer lower-cut, less flashy footwear, often at a fraction of what some of the company's top-selling basketball sneakers sell for.

Known as "low-profile" for their classic look and more reasonable pricing, sales of these sneakers grew 4.4% in 2006, exceeding sales of basketball shoes. The look first became popular in Europe, and has also caught on among fashion conscious metrosexuals and the skateboard crowd. While Nike's $150-dollar shoes might appeal to hardcore athletes (and posers, mostly posers), the low-profile look is gaining ground and is easier on the wallet.

I don't think Nike will have a lot of success in this market. While Nike is number one for sporting-related footwear, Puma has a "cooler" image among non-basketball fans. The Puma brand has fashion credibility and I don't think that Nike really does.

Nike says it's making progress on selling lower-priced, lower-cut shoes, but I don't think Puma has a lot to worry about in this area of the sneaker-wars. I'm much happier with $30 Puma's I can but at TJ Maxx (NYSE: TJX).

PPR Group, parent company of Gucci, has offered $7.1 billion for Puma, the company that manufactures basically all of my footwear. PPR is publicly-traded in France, while Puma trades in Germany. PPR said that its offer was "firm and final," but the market seemed to disagree. Puma shares traded slightly above the offer price, indicating that many observers believe that a bidding war will ensue. One prime suspect: Nike.

An acquisition of Puma might make sense for Nike Inc. (NYSE: NKE). While Nike has been hugely successful in the sports apparel market, it has not even come close to duplicating Puma's success as a cross-over, luxury brand for the fashion-conscious. Think of Nike as Pete Rose: Very adept at sports, but widely seen as a bum outside of baseball. Puma is more like David Beckham: Amazingly athletic, in addition to being urbane and sophisticated (and married to the coolest of the Spice Girls).

Nike is currently sporting very little in the way of debt, and could probably afford to take on Puma. The question is, given the company's history of lackluster acquisitions, do they want to?

PPR SA (EPA: PP) owns high-class brands like Gucci, Balenciaga, and Yves Saint Laurent. And so now the company wants Puma? Isn't that going down-market?

Actually, it looks like it's a play to bring Puma into the luxury zone. To this end, PPR bought up a 27.1% stake in Puma and wants the rest of the company (this is according to a story in the Wall Street Journal, which is a paid service). It could be a deal in excess of $7 billion.

I had a chance to talk with Fred Lipman, who is an M&A lawyer and partner at Blank Rome. He thinks there should not be a problem in terms of antitrust clearance.

Although, PPR might have to raise its bid. "Puma's stock price is already over the offer," said Lipman. "Just like the US, there are many hedge funds in Europe that can drive the stock price. To get this deal done and get the shareholder votes, PPR might have to increase the bid – unless it feels it can fight for the current deal."

Lipman also thinks another big issue is the strategic rationale of the deal. According to him: "Are we ready for Gucci Pumas?"

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.