Morning business round-up: Lufthansa sells BMI to IAG


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

British Airways owner IAG has agreed a deal to buy BMI from Lufthansa for £172.5m, but has warned it could lead to job losses.

IAG, which also owns Spanish airline Iberia, will gain 56 more slots at Heathrow airport in the deal.

The airlines said they hoped the takeover would be completed in the first three months of next year.

The deal remains subject to clearance by competition bodies, and rival Virgin has said it will oppose the tie-up.

Yahoo shares rose on reports that the internet company is looking to reduce its stake in China's Alibaba Group and Yahoo Japan.

Yahoo rose 6% on the Nasdaq stock exchange after the New York Times reported the firm was aiming to cut its Alibaba stake to 15% from 43%.

According to some estimates, the deal will value Yahoo's Asian assets at $17bn (£11bn).

Yahoo bought its stake in Alibaba for $1bn in 2005.

The implied cost of borrowing for Hungary has risen after ratings agency Standard & Poor's (S&P) downgraded the country's debt to junk status.

The interest rate, or yield, on 10-year government bonds traded on the secondary market rose from 9% to 9.3% after S&P cut Hungary's rating to BB+ from BBB- on Wednesday night.

S&P said it had doubts about the independence of Hungary's central bank.

The Hungarian government immediately criticised the downgrade.

Japan's economy will shrink by 0.1% in the year to the end of March, according to the latest government forecast, compared with the 0.5% growth it previously predicted.

The government also said growth in 2012 would be 2.2%, down from the 2.7-2.9% it forecast earlier this year.

The government said the downward revisions were due to the strong yen and the eurozone debt crisis.

The Bank of Japan has also warned of weaker growth due to the crisis.

Media caption,
Biz Heads

Luis de Guindos, a former Lehman Brothers executive, will be economic minister, while Cristobal Montoro was appointed treasury minister.

The new ministers will be required to help steer the country through its toughest economic crisis in decades.

The UK economy grew by 0.6% between July and September, official figures have shown, faster than previous estimates of 0.5%.

Growth was driven by strong performance in the service sector and construction.

However, the growth estimate for the second quarter of the year was revised down from 0.1% to zero by the Office for National Statistics (ONS).

The office also said the UK's current account deficit in the same period was £15.2bn, the highest on record.

The latest edition of Business Daily looks at the changes being made by employers to accommodate an older workforce, as retirement ages across the world increase.

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