Over the last few months, as Pepsi worked out its deal to buy its main bottlers, Coca-Cola said it wasn’t interested in such a deal. Well you can’t keep a good idea down and today Coke, which once liked to be known as “the real thing,” unveiled plans to buy the bottler’s North American business.

The deal includes about $3.2 billion in Coke’s equity in CCE and the assumption of nearly $9 billion in debt. PepsiCo is due to close the $7.8 billion purchase of its largest bottlers, Pepsi Bottling Group and PepsiAmericas, perhaps within the next 24 hours. Coke expects the transactions to add to earnings by 2012. It also expects cost savings of $350 million over four years, with 70 percent of the savings realized by the end of 2012. It expects to take a related one-time charge of $425 million over three years, but will not need to use any additional borrowings.

“Coke couldn’t sit back while Pepsi delivered $600 million (or more) in synergies for reinvestment and then transformed its U.S. business model,” said ConsumerEdge Research analyst Bill Pecoriello, who suggested Coke may not be interested in holding onto the asset for the long haul.

By Jason Neely

A 20 billion euro project is great, but not if it costs 31 billion to deliver. Most companies don’t walk away from deals that bad. They run.

But Europe’s biggest and now most fraught defence collaboration, the A400M military transport plane, is no ordinary deal.

European countries haggled for years before agreeing on it, despite their desire for a home grown alternative to U.S. planes such as the C-130 Hercules.

Governments in the end wanted the jobs and sophisticated technology.

For manufacturer EADS it was a project so vast the firm overlooked one disastrous clause – it was a fixed-price deal.

The company’s current showdown with governments over the A400M centres on that clause – and the risk that EADS may have to absorb a big chunk of cost overruns now topping 11 billion euros.

U.S. President Jimmy Carter famously cancelled the B-1A bomber in 1977 citing its high costs but European governments have tied each other into the A400M. Hence the current impasse.

EADS is unlikely to simply walk away either, but the two sides could very well shrink the number of planes required.

At least 180 deliveries spread out over perhaps a decade, the very size of the project is EADS’ biggest problem. That’s a long time to work for less than nothing.

Rival BAE Systems could offer a tip or two on squaring off with government over fixed-cost deals.

BAE was forced to take a 750 million pound charge for cost overruns on submarines and spy planes in 2003.

But it demanded Britain shoulder risk in any future deal and has since looked mostly to the United States for work.

EADS will have to take a hit on the A400M, but if it’s wise, it too will seek a deal that safeguards itself from similar disaster in the future.

The company got rich building Airbus planes but has big ambitions in defence, where it has worked mainly in consortia making Eurofighter jets and MBDA missiles.

That ambition, much like its over-budget A380 superjumbo airliner, is now hurting EADS. It’s time for the company to think if not small, then at least smaller.

Palm Inc’s stock swooned this morning after the smartphone maker said it expects third-quarter and full-year revenue to be lower than expected because not enough people are buying its phones. In Palm’s exact words:

Revenues for the quarter and full year are being impacted by slower than expected consumer adoption of the company’s products that has resulted in lower than expected order volumes from carriers and the deferral of orders to future periods.

Palm launched the Pre last year amid much fanfare, followed by the Pixi, with many celebrity tech columnists ooh-ing and aah-ing about the operating system, webOS, that could run multiple applications at once and perhaps even become the iPhone killer. But that enthusiasm has clearly not translated into sales, as Palm struggles to loosen Apple’s vice-like grip on the consumer smartphone market — even as newer competitors, such as Motorola’s Droid and Google’s new smartphones, based on its Android operating system, crowd the market.

In recent conversations, people close to Palm have said the company is single-mindedly focused on building scale and developing its “app store,” the virtual shop where users can buy small programs for everything from calorie-counting to weather. To that end, Palm is seeking to build its geographic presence and build partnerships with more wireless phone carriers (Sprint and Verizon currently sell its devices, and AT&T also plans to sell them).

“Palm’s just a little peanut with a good operating system,” said T Rowe Price portfolio manager David Eiswert recently, when he stopped by our offices for a chat. Eiswert, whose fund owns about 12 percent of the company, is bullish on Palm, and calls himself a webOS guy. But while he believes that the recent tie-up with Verizon will help it gain “shelf space” from Research in Motion, which sells the BlackBerry device, Eiswert said that Palm has a long way to go.

“Is Palm’s operating system where it needs to be? No,” Eiswert said, adding that an upcoming version of the software could be a big improvement. “The question for Palm is, can they deliver a compelling product? Can they get distribution?” The hardware, too, he said, was just “OK, not compelling.”

So then, do Palm’s big shareholders, including private equity firm Elevation Partners and funds Fidelity, T Rowe Price and Capital World Investors, have a potential sale of the company in mind? The market clearly believes that the company could be sold any day; rumors about a deal have repeatedly driven the stock up and down in recent months.

A deal for Palm could make sense — at least, that’s what nearly every tech and telecoms banker I speak to seems to think. As for who would make a good fit, there is a list of potential suitors, of which Finnish cellphone giant Nokia may be the one who needs it most.

“The three companies driving the future of mobile computing — Apple, Android and Palm — are all in Silicon Valley,” Eiswert said (BlackBerry maker RIM doesn’t fit his bill because they make 2.5G phones that have less processing power than the newer smartphones). “Nokia doesn’t have the software or expertise… they really have to reinvent themselves. If we wake up tomorrow and Nokia buys Palm, for $3 billion or $5 billion, it doesn’t matter, Nokia’s stock price (will) go up.”

Other potential buyers of Palm include PC maker Dell, which is testing the mobile phone market with its own device, but it  may need to step up its game to gain even reasonable market share.

Then, there are the Korean phone manufacturers, Samsung and LG. I was just reading an article in the March 1 issue of Bloomberg BusinessWeek that says Korea may be “losing its edge in the international market, despite its reputation as the epicenter of digital cool.” Samsung and LG just don’t have the smartphone software to compete, which is a growing concern for the country, the article states. Could they be interested in acquiring Palm too?

Photo: Palm.com

Thursday’s highlights:

* Coca-Cola Co is in talks to buy most of its largest bottler for roughly $15 billion, including debt, marking a shift in its strategy to keep its bottling operations separate, a person familiar with the situation says.

* Australia’s Origin Energy (ORG.AX) and partner ConocoPhillips (COP.N) will sell feed gas to BG Group’s (BG.L) rival liquefied natural gas project, marking the first collaboration in the country’s LNG sector.

* Agnes Crane of Reuters Breakingviews says U.S. taxpayers extracted a handsome $4.1 billion payout last year in exchange for their $51.7 billion of support since the 2008 rescue of the housing finance giant Freddie Mac. And they’re set to receive an even richer dividend from Freddie this year. But these pounds of flesh make little sense right now.

For more on these and the rest of the latest deal-related news from Reuters, click here.

Elsewhere:

* Wealth manager AMP Ltd (AMP.AX) and No.4 Australian lender Australia and New Zealand Bank (ANZ.AX) are looking at a A$4 billion ($3.6 billion) deal where the bank would get a significant stake in AMP in exchange for its wealth management business, the Age newspaper reported. Reuters story here.

* Brazilian iron ore miner Ferrous Resources has appointed JP Morgan Cazenove and Deutsche Bank (DBKGn.DE) to plan a 3.2 billion pound London listing, the Daily Mail reported.

* South Korea’s retail-focused Lotte Group has submitted a letter of intent to buy a controlling stake in Daewoo International, putting itself in competition with steelmaker POSCO (005490.KS), a newspaper reported on Thursday. Reuters story here.

* Russia’s Gazprom (GAZP.MM) might control a new gas company to be created out of three already existing firms, the daily Kommersant reported. Reuters story here.

* Spanish utility Endesa (ELE.MC) has put up for sale its gas assets in order to ease its parent Enel’s (ENEI.MI) debt, El Economista says, without citing sources. Reuters story here.

* Britain’s Takeover Panel will consult on whether it could change the timetable and other measures governing dealmaking. Full statement here. Daily Telegraph story here.