MAJOR PAPERS:

• On Friday, the Wall Street Journal reported that a number of firms have been eyeing Kroger Co (NYSE: KR) on the expectation that the company will soon begin exploring a leveraged buyout with the help of investment bank Goldman Sachs Group Inc (NYSE: GS).

• The New York Post reported that Warner Music Group Corp (NYSE: WMG) may look to merge with EMI Group plc ADR (OTC: EMIPY) by appealing directly to the music labels shareholders.
• According to the Sunday Express, Dow Chemical Company (NYSE: DOW) is set to receive a bid of $52-$58 per share, valuing the company at $50B, from a consortium of Middle Eastern investors and American buyout firms.
• The U.K. Telegraph reported that the Royal Bank of Scotland is preparing to delay any rival offer for ABN Amro Holdings (NYSE: ABN) until after Barclays plc ADS (NYSE: BCS) reveals its bid for the company.
• From BusinessWeek's "Inside Wall Street" section:
• Oppenheimer oil guru Fadel Gheit says rumors have resurfaced that Exxon Mobil Corporation (NYSE: XOM) may go after oil and gas company Devon Energy Corporation (NYSE: DVN).
• Napco Security Systems Inc (NASDAQ: NSSC) is hoping GatewayX, a new product introduced in January, will spark a rebound.
• Seed and crop-protection company Syngenta AG ADS (NYSE: SYT) looks to have upside ahead, due to brisk demand for corn to make ethanol is boosting farmers' need for Syngenta's products to fight field pests.

MAJOR PAPERS:

• The Wall Street Journal's (subscription required) "Heard on the Street" column suggested that Deere and Company (NYSE: DE), which has risen 40% since lsat September, may be about to level off as analysts believe the positive outlook is already baked in to the stock price.
• The Wall Street Journal reported that Sanofi-Aventis ADS's (NYSE: SNY) Acomplia, a "miracle weight loss pill", is looking less like a miracle among repeated FDA delays and European restrictions.
• Barclays plc ADS (NYSE: BCS) says it would walk away rather than overpay for ABN Amro Holdings (NYSE: ABN), and rejected suggestions that it might then be vulnerable to a takeover itself, according to the Financial Times (subscription required).
• The Financial Times reported that Sony Corporation's (NYSE: SNE) PlayStation 3 video game console has had a record-breaking launch in Europe, selling about 600,000 consoles in its first two days.
• The Financial Times reported that U.S. drugmaker Merck & Company Inc (NYSE: MRK) won a restatement of its patent for once-weekly Fosamax treatment from the European Patent Office.
• The Financial Times interviewed Barry Diller, the CEO of InterActiveCorp (NASDAQ: IACI), who believes corporate governance may be pushing U.S. companies to go private.

• The New York Times reported that billionaires Eli Broad and Ronald Burkle may be back in the running to buy The Tribune Company (NYSE: TRB), which has responded to a request for additional financial information about the company from the pair.
• The Economic Times reported that Indian telecom operator Hutchison Essar is looking at outsourcing its IT operations to International Business Machines Corporation (NYSE: IBM), in a deal that would be worth $1.4B to $1.6B, according to sources.

MAJOR PAPERS:

• The Wall Street Journal's "Heard on the Street" column focused on Starbucks Corporation (NASDAQ: SBUX), writing that some analysts see the stock rebounding since being beaten down after hitting a 52-week high in November.
• Also in the Wall Street Journal, "The Mossberg Solution" reviewed the Apple TV product from Apple Inc (NASDAQ: AAPL), concluding that it is "a very well-designed product that easily brings the computer and the TV together."
• The Financial Times reported that Mike Mayo, one of Wall Street's best known financial services analysts, is heading to Deutsche Bank AG (NYSE: DB) after leaving Prudential (NYSE: PRU).

• According to the Economic Times, International Business Machines Corporation (NYSE: IBM) is close to signing a 10-year $700M outsourcing contract with Idea Cellular in India.
• The U.K. Times reported that prospective merger partners Barclays plc ADS (NYSE: BCS) and ABN Amro Holdings (NYSE: ABN) are considering using the proceeds from a possible sale of ABN Amro's LaSalle retail bank to generate a merger dividend for shareholders on both sides of the possible merger.

• Henry Blodget's Internet Outsider blog wrote that Google Inc (NASDAQ: GOOG) should buy Spot Runner, which reduces the cost and time necessary to plan and buy a TV advertising campaign.

Barclays Plc.'s (LON:BARC)$80 billion deal to buy European rival ABN Amro Holdings NV (NYSE:ABN) will add to the pressure on banking and financial services sector stocks which have performed poorly this year amid concerns about the economy and the housing market.

A combined Barclays-ABN Amro would be a formidable competitor. There's little geographic overlap between the two banks and about the only area where there is duplication is in fixed-income investment banking, according to the Wall Street Journal (subscription required).

The merger would be the largest ever in the financial services sector and would create the second-largest bank in Europe, according to Bloomberg News.

This has not been a good year for financial services stocks.

Shares of Merrill Lynch & Co. (NYSE:MER) are down 12 percent, Citigroup Inc. (NYSE:C) is down 9 percent, Morgan Stanley (NYSE:MS) has fallen 6 percent while Deutsche Bank AG (NYSE:DB) has plunged 4 percent. Even Goldman Sachs Group Inc. (NYSE:GS) has only managed to gain 2 percent.

If these stocks don't start to perform significantly better, you can bet more mergers of the size of Barclays-ABN Amro will occur.

According to the Wall Street Journal, the European banking space is poised for some serious consolidation [subscription required]. One likely target is ABN Amro Holdings ADS (NYSE:ABN).

The firm has been lagging, which, ironically enough, is the attraction. It means the valuation is reasonable and that there are opportunities to cut costs and streamline operations.

The betting is that Barclays Plc ADS (NYSE: BCS) wants to make a play for the company. Investors seem to like the scenario as on the rumors, ABN's stock surged almost 10%.

What helped spur this was the agitation from a major shareholder, TCI Fund Management. Yes, we are starting to see shareholder activism in Europe.

A big attraction of ABN is its footprint in emerging markets such as in India, China and Indonesia. There is certainly lots of growth opportunities there. Hey, these are places where it's not common for consumers to have credit cards.

A deal for ABN could be a blockbuster. It could easily be more than $70 billion.

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

MAJOR PAPERS:

• According to the Wall Street Journal (subscription required), citing people familiar with the matter, Community Health Systems Inc (NYSE: CYH) is near a deal to purchase Triad Hospitals (NYSE: TRI), which would break up an existing $4.5B private-equity buyout plan.
• The Wall Street Journal's "Heard on the Street" column reported that rumors are swirling that Infineon Technologies ADS (NYSE: IFX) will be chosen to supply the main chip to drive the upcoming iPhone from Apple Inc (NASDAQ: AAPL).

• The Business Standard reported that Reliance Industries is reportedly in advanced discussions with Nova Chemicals Corporation (NYSE: NCX), the plastics and petrochemicals firm, to form a joint venture.
• According to the U.K. Times, Barclays plc ADS (NYSE: BCS) will announce today its formal interest in buying Netherlands bank ABN Amro Holdings (NYSE: ABN) for a price of up to a little less than EUR60B, or EUR31.3 per share, according to reports.
• Dow Jones & Company (NYSE: DJ) is trying to buy the Financial News for GBP25M, the U.K. Times reported.
• The Sunday Telegraph reported that Coca-Cola Company (NYSE: KO) is planning a 'beauty tea' in conjunction with L'Oreal ADR (OTC: LRLCY), called Lumae.
• According to Google Inc's (NASDAQ: GOOG) official blog, it has acquired Adscape media. Terms were not disclosed.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported on Saturday, citing people familiar with the matter, that Google Inc (NASDAQ: GOOG) has begun a test run of serving TV commercials to cable subscribers in Concord, California. The move, said the Journal, could change the way TV ads are sold and delivered.
  
• According to the Financial Times (subscription required), Citigroup Inc (NYSE: C) is expected to announce an agreement with Nikko that will give them "effective control" over the company's core business even if they fail to win shareholder support.

• The Telegraph reported that ABN Amro Holdings (NYSE: ABN) is expected to "throw a bone" at activist hedge funds that are trying to get the company to break-up or sell itself, by promising a special dividend and minor disposals next month.
• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) has obtained two FDA marketing approvals for its Abbreviated New Drug Application.
• Investor's Business Daily's "The New America" column mentioned Cynosure Inc (NASDAQ: CYNO), which makes anti-aging products, positively, saying the company appears to be well positioned as the "skin rejuvenation" market takes off.

MAJOR PAPERS:

• Barron's Magazine (subscription required) highlighted a number of possible M&A targets, along with a few stocks it believes to be undervalued:
• M&A is expected to continue in Europe: possible large cap targets include Barclays (NYSE: BCS), Deutsche Telekom (NYSE: DT), Deutsche Bank (NYSE: DB), ABN Amro (NYSE: ABN), Volkswagen (OTC: VLKAY), Koninklljke (NYSE: KPN) and Swisscom (NYSE: SCM); possible small-mid cap targets include Hellenic Telecom (NYSE: OTE).
  
• There may still be upside in shares of Xerox (NYSE: XRX), says James Benson, a partner and securities analyst at Harris Associates.
• Shares of YRC Worldwide (NASDAQ: YRCW) may be undervalued by as much as 50%, says Barron's "Bottom Line," which writes that shares could climb above $60.
• The Wall Street Journal (subscription required) featured an article on Pfizer's new CEO and his strategic plan.
• Pfizer's (NYSE: PFE) new CEO, Jeffrey B. Kindler, is preparing to detail his strategic vision for the company that will likely involve more job cuts.
• Hewlett-Packard (NYSE: HPQ) is claiming a nanotechnology research breakthrough that would bring big benefits in performance.
• According to a Nomura report, Sony Corp (NYSE: SNE) will reach only 75% of its global target for PlayStation 3 sales this fiscal year through March.
• The New York Times had an article highlighting the possibility of New York funding stem cell research.
• New York Governor Eliot Spitzer called for the passage of a $2B 10-year bond initiative for research and development, at least half of which would be set aside to pay for stem cell research.
• Citigroup (NYSE: C) may shorten its name to Citi and drop its umbrella logo.

• The UK Times wrote that Ford (NYSE: F) may have trouble selling its Aston Martin unit after potential buyers found problems in the divisions books while doing due diligence.
• El Pais wrote that Fidel Castro is in "very grave" condition after three failed operations and complications from an intestinal infection known as diverticulitis.