Health-care companies with deep pockets and shallow product pipelines are poised for a busy year of acquisitions, with biotechnology firms likely to be among the most prominent targets even as they trade at record highs.

The seeds of this year’s deals may be planted next week at JPMorgan Chase & Co. (JPM)’s annual health-care conference in San Francisco, where more than 300 companies will present to thousands of investors about the year ahead. Meanwhile, business development executives will be meeting in hotels surrounding the conference that begins Jan. 13.

Large drugmakers from Merck & Co. (MRK) to Bristol-Myers Squibb Co. (BMY) are dealing with patent expirations on top medicines and cutting researchers as they refocus their product development strategies. At the same time, prices on targets are expected to stabilize after last year’s run-up, said Jeff Stute, JPMorgan’s head of health-care investment banking.

“We see M&A in the health-care sector being up materially in 2014 at all size levels and across all subsectors,” Stute said in a telephone interview. “Buyers and sellers will get comfortable with the new reality of where assets are priced.”

Biotechnology companies in particular had a standout 2013, with the Nasdaq Biotechnology Index gaining 66 percent, topping a 30 percent increase for the Standard & Poor’s 500 (SPX), and closing yesterday at a record high of 2,449.25. The industry saw the most IPOs since 2000, as investors were drawn to the prospects of revenue growth in an industry seeing a record number of new drug approvals over two years….

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Sysco agreed on Monday to buy US Foods for about $3.5 billion in stock and cash, uniting two of the biggest food distributors in the country.

Under the terms of the deal, Sysco will pay $3 billion in stock and $500 million in cash. The transaction will give US Foods’ current owners, the investment firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts, a stake of roughly 13 percent in the combined company.

Including the assumption of US Foods’ debt, the transaction is valued at $8.2 billion.

By buying one of its largest rivals, Sysco will solidify its position as the reigning giant of food distribution. The company, whose trucks move millions of pounds of frozen food and kitchen supplies around the country, expects its annual revenue to grow by 46 percent, to $65 billion.

The deal will also give US Foods’ owners a path to exit their investment. Clayton Dubilier and K.K.R. bought the company from the Dutch grocery store company Royal Ahold in 2007 for about $7.1 billion, which included debt.

The company continued to increase its sales after its leveraged buyout, reporting $21.7 billion in revenue last year…..

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This week, the government announced that it was dropping its lawsuit to block the merger of American Airlines and US Airways after the parties reached a settlement. The new American will be the world’s largest airline and one of just three remaining legacy carriers in the United States, along with Delta Air Lines and United Airlines.

“This settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country,” Attorney General Eric H. Holder Jr. said this week.

But three months ago, in August, he had this to say about the proposed merger: “The American people deserve better. This transaction would result in consumers paying the price — in higher airfares, higher fees and fewer choices.” And in its complaint, the Justice Department noted that the three legacy carriers and Southwest would control 80 percent of domestic air service.

No wonder this week’s settlement left many antitrust experts scratching their heads, even as the airlines and their shareholders celebrated.

The Justice Department did get some important concessions from American and US Airways, primarily an agreement to give up slots at some of the nation’s busiest airports, including La Guardia in New York, Reagan National in Washington and Logan Airport in Boston, to low-cost carriers. The department said it was the biggest divestiture program agreed to by any airline as a condition of federal approval of a merger.

But when the government sued to block the merger, it stressed the “thousands” of routes where US Airways and American “compete directly,” not just a handful of congested airports. Unmentioned in the settlement, but a prominent feature in the earlier complaint, are US Airways’ low-cost Advantage Fares, which the government argued would probably vanish on the many routes where competition between the two carriers would be eliminated.

“The settlement is hard to square with the original complaint, ” said Christopher L. Sagers, an antitrust professor at Cleveland-Marshall College of Law….

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BlackBerry Ltd. (BBRY), once valued at $83 billion, may be stuck with the cheapest valuation ever for a North American technology or telecommunications takeover.

The smartphone maker said yesterday it reached a tentative agreement for a $4.7 billion buyout by a group led by Fairfax Financial Holdings Ltd. (FFH), its biggest shareholder. Including net cash, the proposal values the Waterloo, Ontario-based company at an 80 percent discount to its book value and just 0.17 times its sales, the cheapest revenue multiple on record among similar-sized North American telecommunications or technology acquisitions, according to data compiled by Bloomberg.

While the company has six weeks to seek other bids, Pacific Crest Securities said investors should be happy to get the $9 a share that Fairfax is offering. Chief Executive Officer Thorsten Heins, who took over in January 2012, didn’t publicly disclose the company was for sale until last month after almost a year of canvassing potential buyers. Now, BlackBerry has posted a string of quarterly sales declines and lost almost $79 billion in market value as it fell behind Apple Inc. and Google Inc. Last week, BlackBerry said it will cut a third of its workforce and take a writedown of as much as $960 million….

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The companies said they extended the date by which either airline could terminate the merger pact to either January 18, 2014, or the 15th day following the entry of a court order approving the merger should it be entered on or before January 17, whichever is later.

The previous termination date for the deal was December 17.

Should the U.S. district court hearing the government lawsuit rule against the merger, the carriers said either party may end the agreement five days after the entry of an order prohibiting the deal….

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Microsoft Corp. (MSFT)’s $7.2 billion takeover of Nokia Oyj (NOK1V)’s handset business cost shareholders more than twice that as it dashed hopes for a fresh start under Steve Ballmer’s successor.

The world’s largest software company lost $18 billion in market value since the purchase of Nokia’s mobile-phone assets was disclosed, erasing all of the gains that followed the announcement last month that Ballmer is retiring, according to data compiled by Bloomberg. The agreement cements the departing chief executive officer’s shift toward the more volatile consumer-device business and leaves little room for his successor to take a different tack, Atlantic Equities LLP said.

Microsoft is chasing growth in a market already dominated by Apple Inc. (AAPL) and Google Inc. (GOOG) with devices that generate lower returns than the company’s business-software division. Nokia CEO Stephen Elop is returning to Microsoft as part of the asset sale, making him Ballmer’s most likely successor and signaling that the company is in smartphones for the long haul, Sanford C. Bernstein & Co. said, even as some shareholders say that strategy is misplaced…..

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In buying out its longtime partner, Vodafone of Britain, the telecommunications giant is also striking a takeover more than a decade in the making, taking advantage of receptive debt markets and its own strong stock.

And Vodafone will be flush with cash to reinvest in its own businesses and to buy competitors in Europe and emerging markets.

The roughly 100 million Verizon Wireless customers probably will not see any change in their services, at least at first. But the telecommunications industry is very much in flux as new competitors like SoftBank of Japan have entered the market, while new opportunities for wireless services have emerged. Verizon viewed gaining full control of its biggest business as essential to addressing those trends. In the most recent quarter, wireless services accounted for $20 billion of the company’s nearly $30 billion in revenue.

Among its plans is bundling mobile broadband services with wired offerings like high-speed, fiber-optic connections.

“There’s a big phase of growth in the U.S. telecom market,” Lowell C. McAdam, Verizon’s chief executive, said in an interview. “The timing was perfect for us.”

The deal is enormous by any measure, with the price nearly equaling Verizon’s entire market value. As part of the complex deal, Verizon agreed to pay $58.9 billion in cash and an additional $60.2 billion worth of its shares to Vodafone, the latter of which will be distributed to Vodafone’s shareholders. Verizon will also sell its minority stake in Vodafone’s Italian business for $3.5 billion, as part of a series of smaller transactions tied to the deal. The amount it is paying is merely for 45 percent of Verizon Wireless, implying that the wireless unit is being valued at nearly $290 billion.

Vittorio Colao, chief executive of Vodafone, told reporters on Monday that the deal offered good value for his shareholders. “It was a good move for both partners, and we were able to find the right price,” he said….

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The trial over the merger of AMR Corp. (AAMRQ) and US Airways Group Inc. should wait at least until March instead of starting in November, the U.S. government told a court.

Rushing to try the antitrust lawsuit isn’t a good idea given the case’s complexity and the potential for the merger to hurt competition and consumers, the Justice Department said in papers filed yesterday in federal court in Washington.

Short-term costs and uncertainties must be balanced against “the need for a full and fair exploration of the claims at issue, and the merger’s potential for long-term harm to consumers,” the government said.

Given the volume of trial materials to be exchanged, including interviews, expert testimony and data, “that is hardly a leisurely schedule,” it said.

The Justice Department’s request for a trial date of March 3 “is entirely unreasonable” given that the department has already been investigating the merger for more than 16 months, Tempe, Arizona-based US Airways and Fort Worth, Texas-based American Airlines said in a joint statement. The airlines proposed a November starting date for the trial….

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The U.S. Department of Justice sued two weeks ago to block the creation of the world’s biggest carrier, saying it would reduce competition and boost fares. Without the $12.1 billion deal, both airlines could turn their sights to JetBlue, whose smaller size makes it less likely to raise antitrust issues while also offering a base in New York, the busiest air-travel market, said JetBlue shareholder Eagle Asset Management Inc.

While buying JetBlue would do less to close the gap with larger rivals, shareholder Disciplined Growth Investors Fund said the airline remains one of the more attractive candidates left in an industry shrunk by mergers and beset by bankruptcies. With a market value of $1.8 billion, the company may be vulnerable as its shares trail an index of the largest U.S. airlines by the most since 2006, according to data compiled by Bloomberg….

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After working for months under cover of secrecy — Mr. O’Brien’s company was code-named “Delta,” while Mr. Ratterman’s was “Blue” — the two sides negotiated many of the finer points of a merger. The talks moved so quickly that their meeting finished an hour ahead of schedule.

The fruits of their efforts were on display Monday, as BATS and Direct Edge announced their plans to combine under the BATS name in an all-stock deal. The goal: to displace the New York Stock Exchange and the Nasdaq atop the world of stock markets. Combining the two will vault the new company past Nasdaq to become the second-largest exchange operator in the United States.

“It pretty much guarantees you’re going to have a significant force to be reckoned with in the global exchange place for decades to come,” Mr. O’Brien said by phone.

The deal, the terms of which were not disclosed, is the latest in the world of market operators, as companies seek more efficiencies and broader global reach by combining. Last year, the IntercontinentalExchange agreed to buy the N.Y.S.E.’s parent, NYSE Euronext, for $8.2 billion. Also last year, the parent of the Hong Kong Stock Exchange paid more than $2 billion to buy the 136-year-old London Metal Exchange.

The pressure to join forces is a result of the challenges and changing environment facing exchanges. Technological advances and regulations have encouraged competition between markets, driving down the profitability of the Big Board and Nasdaq….

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