Tuesday, 28 August 2007

Today's News

WAL-MART looks set to do battle on its home turf with Tesco, the UK supermarket giant. The retail goliath said it was hiring middle management level executives to help evaluate the type of stores it operates. Tesco is preparing to launch in the US later this year with smaller convenience stores of around 1000 square feet, against the colossal Wal-Mart stores that measures on average 107 000 square feet with Supercentres at 187 000 square feet. (source: Daily Mail)

Singapore Airlines is set to buy a stake in one of China’s largest airlines in a move that will fuel fresh speculation over the future with Virgin Atlantic. The Singaporean carrier is tipped to team up with Temasek, Singapore’s state-owned investment company, and take a 25% shareholding in China Eastern Airlines worth a possible $930 million (£465 million). The long-awaited deal would give it access to one of the world’s fastest-growing markets for air travel. It is forecast to grow fivefold by 2025. Details of the agreement are expected to be revealed on September 2.

The Chinese were initially demanding a $930 million (£465 million) price and that this may have since come down to as low as $500 million (£250 million). The Chinese airline ran up losses of $438 million (£219 million) last year. Analysts added that Singapore Airlines had also been concerned about whether it will be able to exert as much influence over China Eastern’s management as it would like. This seems to be one of the issues that is forcing a rethink over Singpore Airlines’ 49% investment in Virgin Atlantic, which was bought for £600 million in late 1999. (source: Times Online)

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