Fri, Jun 27, 2014 - Page 15 News List

World Business Quick Take

Agencies

MACROECONOMICS

US GDP shrank 2.9% in Q1

The US economy contracted at a much steeper pace in the first quarter than previously estimated, turning in one of its worst-ever non-recession performances, but growth already appears to have rebounded strongly. The US Commerce Department said on Wednesday that GDP fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1 percent pace it had reported last month, as the economy was held back by an unusually cold winter, the expiration of long-term unemployment benefits and cuts to food stamps, which curbed consumer spending. The economy was also weighed down by a slowdown in the pace of restocking.

FINANCE

LSEG to buy Russell

The London Stock Exchange Group (LSEG) has agreed to buy US asset manager Russell for US$2.7 billion in order to diversify and grow its business in the US, it said yesterday. The deal, worth the equivalent of 1.98 billion euros, also involves the group buying Russell’s index business from parent NorthWestern Mutual. The British group said it would raise US$1.6 billion from the sale of new shares to help fund the deal.

RETAIL

Ikea raises US hourly pay

Ikea’s US division is raising the minimum wage for thousands of its retail workers, pegging it to the cost of living in each location, instead of its competition. The 17 percent average raise, expected to be announced yesterday, is the Swedish ready-to-assemble furniture chain’s biggest in 10 years in the US. The pay hike is to take effect on Jan. 1. It will translate to an average wage of US$10.76 an hour, a US$1.59 increase from the previous US$9.17. About half of its 11,000 hourly store workers will get a raise.

MEDICAL

Philips, Salesforce team up

Royal Philips NV and Salesforce.com Inc say they are jointly developing a software platform for medical services. In a statement yesterday the companies said the system would be used for “patient relationship management,” for instance allowing doctors and nurses to collaborate on patient treatment. Philips is a major maker of medical devices and medical information systems, while San Francisco-based Salesforce.com operates an Internet-based system that helps companies keep track of their customers. The companies did not reveal any financial terms of the deal, or any targets.

BANKING

PRC bank buys London office

China Construction Bank Corp (中國建設銀行), the nation’s second-largest lender, bought an office building in London for £110 million (US$187 million) as it expands in Europe after becoming the city’s first yuan clearing bank. Construction Bank will use the 11,420m2 building on 111 Old Broad Street as its European headquarters, Knight Frank LLP, which advised on the sale, said in an e-mailed statement yesterday. The seller, Belgian bank KBC Groep NV, will remain in the building under a lease agreement.

E-COMMERCE

Rakuten to take airline stake

Japan’s top e-commerce site operator Rakuten will enter the air travel business by allying with Asia’s biggest budget carrier, Malaysia-based AirAsia, a report said yesterday. Rakuten is preparing to make a capital injection in AirAsia’s Japanese unit, possibly next year, the Toyo Keizai economic magazine said on its online edition. Two or three more Japanese companies may also put cash into AirAsia Japan, it said.

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