LUNCH DEALS: JBWere reborn

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NAB spends $99 million to buy venerable Melbourne broking house JBWere from Goldman Sachs, while ANZ may be looking to buy the Asian private banking interests of ING Groep. Meanwhile BHP Billiton is rumoured to be looking at a deal with Alumina and reports emerge of greater Indian investment in Australia's coal sector.

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National Australia Bank
Melbourne broking house Goldman Sachs JBWere has been purchased by Melbourne-based lender National Australia Bank in a $99 million cash deal. Following six months of negotiations, NAB will take 80.1 per cent of the business, to be rebadged JBWere, with the remaining 19.9 per cent to be retained by management. Goldman Sachs, which American journalist Matt Taibbi controversially described as "a great vampire squid wrapped around the face of humanity” will continue to operate as an investment bank in Australia. JBWere was indeed its only retail broking division. JBWere will now become a portfolio business of MLC, the bank's wealth management division. Funds under advice of $38 billion and funds under management of $10 billion will greatly complement NAB's existing business. Chief executive Cameron Clyne has described the industry as having significant upside. As for other upside, there's still plenty of cash left in the till for further acquisitions, which the mole in the street is reporting to include parts of British banks that can be bolted on to NAB's subsidiaries in the UK, Clydesdale Bank and Yorkshire Bank. Even allowing for a capital boost to Cyldesdale, following Standard & Poor's credit rating reduction, the $2 billion in equity NAB raised from institutions last week should be more than adequate. Other rumourmongers say that NAB could also expand into Islamic banking, which former Australian division chief Ahmed Fahour was so bullish about he moved to Bahrain. The $920 million Australian loan group of struggling commercial lender CIT Group is also speculated to be of interest.
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Australia and New Zealand Banking Corporation
NAB might not be the only big Australian bank to expand in the private wealth area. Daiwa Securities analyst Johan Vanderlugt today wrote that ING Groep's private banking business in Asia could be a "compelling strategic fit” for Australia & New Zealand Banking Group. ANZ is armed with $4.7 billion of freshly-raised money and is no doubt looking for more acquisitions in the region beyond several Asian units of Royal Bank of Scotland. Vanderlugt says that as much as $3.3 billion could be viewed as a "potential war-chest”. So, how much would war on ING Private Banking cost? Sources have told Bloomberg that ING Private's combined Swiss and Asian assets could be worth $US1.5 billion, a little more than half that war chest, but the Asian unit alone could go for $US600 million. The division has offices in Singapore, Hong Kong and Manila, where ANZ has a presence. The RBS assets that ANZ is seeking are in Singapore, Hong Kong, Vietnam, Taiwan and Indonesia.
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BHP Billiton and Alumina
Rio Tinto's undoing was its top-of-the-market bid for Alcan, which saddled it with debt it did not need at a time when aluminium prices crashed. Could a bottom-of-the-market bid by BHP Billiton for rival Alumina therefore make sense? The Financial Review has reported a rumour that BHP was planning a bid for the ASX and NYSE-listed Alumina in the "foreseeable future". But there are plenty of reasons not to believe it. BHP has been closing aluminium plants left right and centre and recently sold its interests in Suriname to a subsidiary of the Alcoa World Alumina and Chemicals joint venture, in which Alumina has a 40 per cent share. BHP certainly has a sizeable war chest for well-timed acquisitions, but the money's still on an offer for one of several potash companies in Canada and maybe a bottom-of-the-market diamond joint venture with Rio Tinto in the northern wilds of Canada. It's even been speculated that BHP and Rio could merge their coal assets in Queensland and New South Wales but the market seems to have gone silent on that one. And then there's talk of buying Woodside Petroleum or expanding its own petroleum division through smaller acquisitions. The Manila Times this week reported that BHP was in talks with PNOC Exploration Corporation about projects in the Philippines.
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Mining buying
Talk of foreign investment in Australia's mining industry tends to focus around Chinese companies, but there's a whole other world out there and the Financial Review reports rumours that America's Newmont Mining could be keen on Newcrest Mining (maybe they'll call it NewCo Mining) and meanwhile Coal India has called for expressions of interest from mining companies in Australia, South Africa, the US and Indonesia. Not much yet to report on the Newcrest/Newmont story, but according to documents obtained by The Australian, Coal India said "the emerging business environment, therefore, necessitates immediate acquisition of coal resources abroad.” Indian companies do not have a significant presence in Australia's coal sector but Gujarat NRE Minerals, majority owned by Gujarat NRE Coke, has two mines in New South Wales and is currently in a hostile takeover bid for Rey Resources. State-owned Coal India has meanwhile flagged plans to float joint ventures to extract coal from abandoned mines in the country's east. Rio Tinto is one of the parties talking with Coal India about the initiative. The Times of India reports that ArcelorMittal, JSW Steel and Essar Mineral Reserves are among the other parties.

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Wrapping up
Two Aussie icons have been saved from sale with Coca-Cola Amatil saying the disposal of canned fruit business SPC Ardmona is "not even remotely on the agenda" and Pacific Brands scrapping plans to sell its $80 million Sleepmaker bedding business. The same can't be said of the iconic Holden, however, with rumours that it's in the sights of China's Dongfeng Motor Group refusing to die. The acquisitive Dongfeng has meanwhile announced that its joint venture with Nissan would spend $US732 million to expand capacity at a new car plant in Guangzhou. China's Great Wall Motor Company is also in expansion mode, planning a Shanghai initial public offer, but the privately-owned group has said it is not interested in overseas acquisitions. Closer to home, GUD Holdings has dismissed speculation that it would make a full bid for Breville Group, flagging instead its interest in a bolt-on to its pump business and Carsales.com.au has suggested that it may release details of a possible listing in the coming month. And finally Kohlberg Kravis Roberts has dropped out of a bid for Anheuser-Busch InBev's Central and Eastern European assets. CVC Capital Partners is offering up to €1.5 billion for the unit, according to Belgian newspaper De Tijd, setting a valuation that investment bankers for will no doubt be crunching in the event that Japan's Asahi Breweries or another party makes a bid for Foster's Group. Foster's has been tipped to write-down its Southcorp wine assets at its results presentation next month.