UPDATE 3-Deals of the day -- mergers and acquisitions

(Adds Microsoft, CIC, Caja Madrid and others)

Oct 16 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S. and Asian companies were reported by 2000 GMT on Thursday. (For Reuters columns on deals, click on [DEALTALK\] )

** Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) Chief Executive Steve Ballmer said a Web search advertising deal with Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) makes economic sense and may still be possible, though the two sides are not in any discussions. [ID:nN16398342]

** Germany's TUI AG (TUIGn.DE: Quote, Profile, Research, Stock Buzz) said it has no intention for now of making an offer to buy out other shareholders in its British tour operator, TUI Travel Plc (TT.L: Quote, Profile, Research, Stock Buzz), sending the UK company's share price sharply lower.

To read more, please double click on [ID:nLG465648]

** China Investment Corp intends to raise Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) stake to 12.5 percent from 9.9 percent by buying shares on open market-source. [ID:nWEN9205]

** The Federal Reserve Board said on Thursday it approved the plan by Spain's largest savings bank, Caja Madrid, to acquire 83 percent of City National Bancshares Inc of Miami, Florida. [ID:nN16409016]

** Electro Scientific Industries Inc (ESIO.O: Quote, Profile, Research, Stock Buzz), which supplies photonic and laser systems, agreed to acquire metrology components and optical systems maker Zygo Corp (ZIGO.O: Quote, Profile, Research, Stock Buzz) in a stock deal valued at $173.5 million. [ID:nBNG402582]

** A bank founded by Russian gas giant Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) has bought one of Russia's top 50 banks, the latest purchase of a privately owned bank by state-related structures as Russia fights the credit crisis.

Gazenergoprombank, whose website says it was "founded by structures included in the Gazprom group", said in a statement it bought 100 percent of Sobinbank. It did not disclose the price. [ID:nLG385920]

** Mexico's Grupo Modelo, maker of Corona beer, on Thursday said it initiated arbitration against its U.S. partner Anheuser-Busch, claiming it was not consulted about Belgian brewer InBev's proposed takeover of Anheuser.

Anheuser-Busch Cos Inc (BUD.N: Quote, Profile, Research, Stock Buzz) agreed in July to a $52 billion takeover by InBev NV (INTB.BR: Quote, Profile, Research, Stock Buzz), maker of Stella Artois and Beck's, to create the world's largest brewer. [nN16383058]

** Eli Lilly and Co (LLY.N: Quote, Profile, Research, Stock Buzz) Chief Executive John Lechleiter said his company would look at expanding its presence in biotechnology, even as it deals with its acquisition of ImClone Systems Inc (IMCL.O: Quote, Profile, Research, Stock Buzz) and the ongoing credit crisis. [ID:nN16517626]

** Japanese trading house Marubeni Corp (8002.T: Quote, Profile, Research, Stock Buzz) said it has agreed to buy an additional stake in Australia coal miner Resource Pacific Holdings from Xstrata's (XTA.L: Quote, Profile, Research, Stock Buzz) Australian coal unit for about 13 billion yen ($130 million). [ID:nT303655]

** Mighty River Power has become a 19.95 percent cornerstone shareholder in wind turbine manufacturing company Windflow Technology with an investment of over $7.1 million. [nWLF001116] (Compiled by Tina Kwan in Singapore, Mary Meyase and Kuganandhan Paramanandan in Bangalore)