Knight Capital Group (NYSE: KCG) is in talks to sell its market-making business, according to the WSJ. Likely bidders include Getco LLC and Virtu Financial LLC. Knight raised nearly $90 million in equity funding back in August after a software glitch caused a massive trading loss. Investors in that package included Getco, The Blackstone Group, General Atlantic and TD Ameritrade. www.knight.com

Castanea Partners has agreed to sell Newport Beach, Calif.-based Urban Decay Cosmetics to L’Oréal(Paris: OR). No financial terms were disclosed, but WSJ puts the price-tag at between $300 million and $400 million. www.urbandecay.com

EQT Partners
 and Investor AB are in talks to sell Swedish medical equipment maker Gambro AB to 
Baxter International
 (NYSE: BAX) for approximately $4 billion, according to Reuters. www.gambro.com

IK Investment Partners
 is considering either a sale of floatation of German fire extinguisher makerMinimax, according to Reuters. The company generated around €1 billion in 2011 sales.www.ikinvest.com

Mohawk Industries (NYSE: MHK) is in “advanced talks” to acquire Italian ceramic tile maker Marazzi Group SpA, according to Reuters. The deal would be valued at around $1.2 billion. The Marazzi family holds a 51% stake in the Marazzi Group, while the remaining 49% is held by Permira and Private Equity Partnerswww.marazzi.it

SafeNet Inc., a Belcamp, Md.-based information security company owned by Vector Capital, has agreed to sell its government solutions unit to an undisclosed buyer. The company withdrew registration for a $300 million IPO earlier this year. www.safenet-inc.com