The credit crunch has made it nearly impossible for private equity firms to pull off multi-billion dollar deals. As a result, a variety of strategic buyers have capitalized on the situation.

But, even this trend may falter. Just look at Waste Management Inc.'s (NYSE: WMI) $6.73 billion buyout bid for rival Republic Services Inc. (NYSE: RGS) Well, today Waste Management said it is going to drop the deal.

Why? Of course, it's about the "market conditions."

But, even top companies are having difficulties getting financing. Besides, a big financial commitment could put pressure on Waste Management's credit rating.

Then again, the good news for Waste Management is that the core business continues to be strong. The company forecasts Q3 earning at $0.62 to $0.63 per share. In fact, the recent decline in fuel costs should be a nice boost.

So far in today's trading, the shares of Waste Management are up 6% to $27.29. Republic's shares are up 3.47% to $3.47%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

As soon as Washington Mutual (NYSE: WM) evaporated, the natural question was: "Who's next?" And after its stock plunged 38% during the day, it now looks like the next one to go will be Wachovia (NYSE: WB). This time the buyer could be Citigroup (NYSE: C),

With $120 billion in adjustable rate mortgages (ARMs) it got through its Golden West Financial acquisition, Wachovia is particularly vulnerable to the capital-eroding impact of a drop in their value. But if Citi bought Wachovia, it would get a stronger presence on the East Coast and its well-regarded retail banking management.

Citi is not the only firm to talk merger with Wachovia -- prior to its decision to turn itself into a bank holding company (BHC) on Sunday, Morgan Stanley (NYSE: MS) was in merger discussions with Wachovia. I just wonder how any deal could be struck with Wachovia that would not involve those nasty ARMs. And if those ARMs are involved in a deal, how can the acquirer avoid those nasty digestion problems that have sent Wachovia shares into a dive.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock and has no financial interest in the other securities mentioned.

New data from Dealogic shows that July was the fifth straight month of growth in U.S. mergers and acquisitions activity -- and the highest total since a year ago.

But it's not quite as good as it looks. The data is skewed upward by foreign bids for American companies like Genentech (NYSE: DNA) and Anheuser-Busch (NYSE: BUD) and, according to the Associated Press, "the rise in M&A ... more likely reflects foreign companies taking advantage of the weak dollar than it does a loosening of credit."

But from an investors' perspective, the cause of the increase probably doesn't really matter. Deep value investors like Mohnish Pabrai have been struggling to post strong returns of late, in part because the private equity funds that could be relied on to buy undervalued companies a couple years ago have brought their U.S.-based activity to a hault.

But now the foreign companies and sovereign wealth funds are in the game and, from an investors' perspective, that's just as good -- whoever will buy undervalued public companies at a premium will boost returns. The low price-book, low price/earnings, contrarian investment strategies that haven't worked lately could be ready to start working again, just as they have historically.

InBev, the Belgian brewer, today hiked its unsolicited bid for Anheuser-Busch Cos. (NYSE: BUD) by a whopping $5 a share, making it all but certain that the King of Beers will sell -- unless members of the board of directors have spent too much time sampling their own product.

The $50 billion offer represents a substantial premium over where Anheuser-Busch has recently traded. InBev clearly wants to avoid the hostile takeover it's threatened. It has vowed to keep its U.S. operations based in the company's hometown of St. Louis. The average drinker of Budweiser probably will not notice a difference in the taste of their favorite brew, which may or may not be a good thing depending on one's beer snobbery.

Shareholders, including Warren Buffett, are ready to head to the exits. The stock, which is up 17% this year, is trading up in pre-market trading. The company has little choice but to take the bid. No other logical buyers exist and I would be surprised if private equity players would be willing to top InBev's offer.

About the only potential losers in this acquisition may be media companies.

Citing unnamed sources, The New York Post reports that Blockbuster (NYSE: BBI) could come back to Circuit City (NYSE: CC) to try to acquire the company.

The sources said that Circuit City pulled out because of weakness in the credit markets, but still feel that a deal could have strong long-term benefits. I don't think it makes sense for Blockbuster to acquire the company but, if it does, pulling out for now is probably a good idea. Shares of Circuit City tanked when Blockbuster announced that it was no longer pursuing a deal, and, according to the Post, Best Buy (NYSE: BBY) isn't interested because of antitrust concerns. With few indications that there is anyone else bidding for Circuit City, and the company's fundamentals in a rapid state of decline, it seems like the longer Blockbuster waits the less it will have to pay. Unless another bidder emerges, there's no real rush.

Back in April, Blockbuster made a preliminary proposal to acquire Circuit City "with an all cash offer in the range of $6.00 to $8.00 per share, subject to due diligence." With shares of Circuit City down 9% to $2.32 on Wednesday, Blockbuster could probably get the company for considerably less if it made another offer today.

With Circuit City bleeding cash, continued consumer weakness could make it really cheap on the courthouse steps later this year. Maybe then Blockbuster shareholders would be more supportive of a deal.

Some people are so eager for Microsoft Corp. (NASDAQ: MSFT) to buy Yahoo! Inc. (NASDAQ: YHOO) that they will do anything to make it happen -- even spread rumors to gullible members of the media. I pity the investors who bought Yahoo!'s stock on this rumor.

Earlier today, TechCrunch's Michael Arrington reported that the talks were back on but also noted that "The information we have is thin, but what one source is saying that Microsoft is talking a price lower than the $33." Thin? So even Arrington was not sure whether he was being told the truth. Interesting.

CNET's Dawn Kawamoto refuted TechCrunch's post, arguing that all Microsoft wanted to do was "sweeten its previous offer" of a partial buyout of Yahoo!'s search business, citing "one major investor who has been in contact without parties."

So, Kawamoto is taking the word of one person to make such a bold statement. This person must be very important if both Microsoft and Yahoo! are willing to confide their most inner-most confidences in him or her. Or maybe not. It's tough to tell. Dow Jones Newswires also denied Arrington's report but added that its sources "indicated the companies might be open to alternative transactions" whatever that means.

The roots of IHS Inc. (NYSE: IHS) go back to 1959. At that time, the company provided catalog databases -- on microfilm -- for aerospace engineers. And, since then, the company has evolved with new technologies, such as CD-ROMs and the internet.

Now, IHS is a comprehensive data and analytics provider for industries like energy, engineering, military, and security. Moreover, the company continues to grow at a nice pace.

In Q2, IHS posted a 34% increase in revenues to $207.2 million (this was the first time the company exceeded $200 million). Net income was $23.3 million, or $0.37 per diluted share. Adjusted EBITDA was $53.3 million, up 49% over the past year.

IHS has also leveraged its platform with acquisitions. For example, the company recently closed four deals. Actually, since the beginning of 2007, IHS has acquired 14 companies. So, to deal with the complexities of the dealmaking, the company created two new positions: SVP-Acquisition Integration and SVP-Finance, Planning, and Analysis.

Going forward, IHS expects full-year revenue growth to range from 21% to 23%. And, yes, the cash flow is forecast to be robust, with adjusted EBITDA growth of 28% to 30%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

When it comes to M&A, JP Morgan's (NYSE: JPM) Jamie Dimon is a pro. But, when he agreed to purchase the distressed Bear Stearns Cos. (NYSE: BSC), he had to reinvent the playbook. After all, he had only a couple days to evaluate the transaction.

Well, there's an excellent piece on this in the Wall Street Journal [a paid publication]. Basically, Dimon realized that speed was critical -- as well as real-time communications. In a complex deal, things can implode easily.

For example, JP Morgan quickly setup fiber cables to connect its information technology (IT) system with that of Bear Stearns. This was critical to allow for the unloading of portfolio assets, which helped to reduce the overall risk of the deal.

In fact, JP Morgan has an army of advisers and employees that are combing through many documents and computer files. No doubt, there are thousands of reports trying to track the progress. And so far, it looks like things are running smoothly.

Sirius Satellite Radio Inc. (NASDAQ: SIRI) Chief Executive Officer Mel Karmazin seems exasperated that the Federal Communications Commission has yet to rule on his company's merger with XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) which was filed more than a year ago.

"We share the reasonable frustration that many of our investors feel regarding the time it has taken," said the loquacious CEO during yesterday's earnings conference call (via SeekingAlpha). "We also share the outrage that some have expressed to me regarding press reports of opportunistic parties trying to take advantage of the process and extract value for themselves that properly belongs to SIRIUS subscribers and shareholders."

Karmazin has a point. The FCC review of the satellite radio merger has moved at a glacial pace because of the opposition of the terrestrial radio industry which figures that any medium that employs Howard Stern needs to be stopped at all costs. As yesterday's earnings report indicates, the industry is not big enough to support two companies.

Sirius reported a first-quarter net loss of $104.1 million, or 7 cents a share, narrower than $144.7 million, or 10 cents a share, a year earlier. Revenue rose 33% to $270.4 million. The results, which matched Wall Street expectations, were helped by a drop in SAC per gross subscriber addition to $91 in the first quarter from $101 a year earlier. The company ended the quarter with 8.64 million subscribers, up 31% from a year earlier. Average revenue per subscriber was little changed at$10.42,

The stalled Delta Air Lines (NYSE: DAL) / Northwest Airlines (NYSE: NWA) deal talks should regain momentum next week, provided Delta's management makes progress in talks with its pilots, The Wall Street Journal reported Wednesday (Subscription required).

Further, independent stock analyst C. Leonard Bauer, said that while the Delta / Northwest talks have been stalled at a traditional, formidable hurdle -- pilot seniority and pilot flight schedules -- "the stars now appear to be lining up to get this deal done."

Bauer said that since the talks began, recent data released indicates that the U.S. economy has continued to slow, and is most likely already in a recession -- never a good backdrop for airlines -- which depend on consumer disposable income for a portion of their revenue. Further, oil has resumed its 'regularly scheduled' movement: up, which has increased aviation costs by at least another 10-15%. Or as Bauer put it, "From a fuel cost standpoint, this is no time to fly commercial jets around less than half full." Oil rose $3.71 to $112.21 per barrel -- an all-time high -- Wednesday afternoon after an unexpected decline in U.S. weekly oil inventories.

Northwest (NYSE: NWA) does not care what the pilots' union thinks. It plans to go ahead with a merger with Delta (NYSE: DAL) despite resistance from the sky captains. Pilots have held up a deal while they negotiate seniority provisions for a combined company.

According to The Wall Street Journal (subscription required), "a jump-started deal wouldn't include terms of a combined pilot labor agreement and the salary enhancements previously foreseen."

Aside from regulatory approval, the deal has two real problems. The first and most obvious is that the pilots may strike the airlines if they feel they have been mistreated. A shutdown, especially if it is prolonged, could cost tens of million of dollars in lost passenger revenue.

In addition, it is not clear that merging airlines has a clear benefit. Fuel costs do not change. The number of employees may fall, but some of the unions involved may ask for higher compensation in exchange for supporting cuts. Customer service department mergers almost always cause problems because putting together incompatible reservations platforms can take several quarters. This can damage relationships with consumers and cause them to use other carriers.

Pushing the merger may be a bad idea, whether the pilots are on board or not.

Douglas A. McIntyre is an editor at 247wallst.com.

The Justice Department has approved Sirius Satellite Radio Inc. (NASDAQ: SIRI)'s $5 million buyout of XM Satellite Radio Holdings Inc. (NASDAQ: XMSR), on the grounds that the deal is not likely to hurt consumers or competition.

In a press release, the Justice Department said that "The likely evolution of technology played an important role in the Division's assessment of competitive effects in the longer term because, for example, consumers are likely to have access to new alternatives, including mobile broadband Internet devices, by the time the current long-term contracts between the parties and car manufacturers expire."

And that is exactly why I wouldn't touch either of these companies. The Justice Department is essentially saying that emerging technology will make satellite radio a small enough part of the industry that consumers won't be harmed by the 2 biggest players merging. Do you really want to own a money-losing entity that will be facing increased competition over the next few years because of new alternatives for consumers?

This post is one of several on business heirs apparent. Let us know in the comments whether you think Charlene de Carvalho-Heineken's heir should take up the reigns of Heineken, and be sure to check out the other heir apparent posts.

It was Charlene de Carvalho-Heineken's father, Alfred "Freddie" Heineken, who built the family business from a small Dutch brewer into Europe's largest brewing empire. A well-known bon vivant, he was friendly with the Dutch royal family, and his sense of humor didn't abandon him even after a three-week kidnapping ordeal in 1983: he claimed that his kidnappers tortured him by making him drink Carlsburg.

On Freddie's death in 2003, his heir apparent and only child, Charlene, became the wealthiest woman in the Netherlands, now worth more than $7 billion. She lives a more low-key life in London with her five children and stock broker, and former Olympic skier, husband. She continues to hold the controlling stake in Heineken, though she hasn't been as involved in the company day-to-day as her father was. She told a family biographer that she intends to keep the business together until her heir apparent, her eldest son, is old enough to take on the mantle.

It appears that just after Electronic Arts Inc. (NASDAQ: ERTS) made a bid for Take-Two (NASDAQ: TTWO) that the board of the smaller company granted management an extraordinary pay package. A number of media are now "going negative" on that deal.

According to The New York Times, "Just days after Take Two Interactive, the troubled video game maker, received a buyout offer from a rival, Electronic Arts, the board of Take-Two approved a measure that significantly increased the compensation that management would receive in a merger or takeover, according to regulatory filings." The Wall Street Journal and MarketWatch have raised similar concerns.

Among other things the monthly management fees paid to ZelnickMedia, which employs the Take-Two CEO and Chairman, went from $208,333 a month up from $62,500. In the case of a takeover the management company would receive 780,000 shares.

Is the U.S. airline sector on the eve of another transformation? One analyst thinks it may be, if recent merger rumblings are any indication.

The Delta Air Lines (NYSE: DAL) / Northwest Airline (NYSE: NWA) merger discussions and chatter that Germany's Lufthansa is considering an investment in a potential merger between United (NASDAQ: UAUA) and Continental (NYSE: CAL) suggest to independent equities analyst C. Leonard Bauer that a new commercial aviation paradigm may be up ahead.

"When you look back at the last 30 years, you can say that the 1980s, clearly, was the decade when mergers were needed to meet the demands of the new market, basically the mass consumer market in the U.S.," Bauer told BloggingStocks Wednesday. "Those larger carriers' lowered seat prices led to a huge increase in domestic travel, which helped bring flight travel to the typical citizen."