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By Sheena Lee

Deal Idea: International Airlines Group, formed by the merger of British Airways (OTC:BAIRY) and Iberia (OTC:IBRLF), is planning to buy out other airline companies worldwide, according to Reuters’ Dealtalk.

Meanwhile, Air France-KLM (AKH), Europe’s largest airline by revenue, and Atlanta-based Delta Air Lines (DAL) are working together to examine a bid for BA competitor Virgin Atlantic, the Sunday Times reported. (Reuters)

IAG boss Willie Walsh said BA and Iberia had drawn up a shortlist of 12 targets to pursue after their $9 billion merger was completed late last year. Hungary, Poland, Czech Republic, Scandinavia and Portugal have all publicly expressed interest in selling their flag carriers, and analysts see Air Portugal as IAG’s best bet, given its attractive long-haul network.

“Air Portugal has the leading capacity share from Europe to Brazil, which is a high-growth market,” said RBS analyst Andrew Lobbenberg. “It also has a portfolio of African routes into former Portuguese colonies, which are now attractive premium travel resources markets — notably Angola.”

Asian airlines like India’s Kingfisher Airlines and Australia’s Qantas (QAN) could be IAG’s prime targets, along with Chinese carriers Air China (OTCPK:AIRYY), China Southern (ZNH) and China Eastern (CEA), said analysts.

Deal Idea: Unilever (UL) should bid for Colgate (CL) if the firm hopes to double its revenue within a decade, said Trefis analysts: “Colgate is the global leader in oral care with close to a third of the market share in the $20 billion market for toothpaste, toothbrush, dental floss and mouthwash. A merger with Colgate would immediately strengthen Unilever’s position in the oral care market from its current market share of around 6%.”

Deal Update: News Corp. (NWS) said that it had reached an agreement in principle to buy the Shine Group, the production company run by Rupert Murdoch’s daughter Elisabeth, an enterprise value of about $673.5 million. (DealBook)

BP said that it would pay $7.2 billion to buy into India’s fast-growing oil and natural gas business, Reliance Industries]. (DealBook)

Billionaire investor Len Blavatnik is expected to bid this week for the publishing arm of Warner Music Group (WMG), the Sunday Times reported. (Reuters)

British spirits maker Diageo (DEO) agreed to buy Mey Icki, a Turkish liquor company, for $2.1 billion. Mey Icki, which was acquired by TPG Capital in 2006 for about $800 million, had begun talks with Diageo in December. (DealBook)

Phones 4u could be sold within weeks after buyout firm BC Partners resurrected talks to buy the privately owned mobile phone retailer for about 700 million pound ($1.1 billion). (Reuters)

CSR (OTCPK:CSRLF), a British chip maker, agreed to buy the Zoran Corp. (ZRAN), a maker of technology for digital photography and video, for about $679 million in stock. (DealBook)

Source: Virgin Atlantic, Other Airlines in Play?