EU bailout boosts banks, enrages Irish taxpayers

Ireland’s international bailout boosted its bank stocks Monday but outraged many hard-pressed taxpayers, who questioned why the government’s pension reserves must be ravaged as part of a deal that burdens the entire country with the mistakes of a rich elite.

Shares in Ireland’s banks rose sharply as markets were encouraged by the bailout’s immediate focus on injecting 10 billion euros into the cash-strapped lenders out of a total of 67.5 billion euros ($89 billion) in loans.

But the Irish were shocked by a key condition for the rescue: that the government use 17.5 billion euros of its own cash and pension reserves to shore up its public finances, which have been overwhelmed by recession and exceptional costs of a runaway bank-bailout effort.

 

Wal-Mart to buy 51 percent of South African company

Wal-Mart Stores Inc. is buying a controlling stake in South Africa’s Massmart in a $2 billion deal. The investment gives the world’s biggest retailer a foothold in the country as it looks to accelerate growth beyond its U.S. business.

The two retailers announced on Monday that Wal-Mart would purchase 51 percent of Massmart for $20.71 per share. Massmart Holdings Ltd. currently has approximately 203.5 million shares outstanding, according to Thomson Reuters.

The offer comes about a month after Wal-Mart disclosed it would likely make the partial offer instead of going with its original plan to buy all of Massmart for about $4.25 billion. The deal had sparked concerns from South African unions as well as some major stockholders.

 

Kraft spars with Starbucks over coffee distribution

Kraft Foods Inc. said Monday it is starting an arbitration proceeding against Starbucks Corp., which has moved to end its agreement with Kraft to distribute and promote its packaged coffee in stores.

Earlier this month, Starbucks said it would end its agreement with the foodmaker, which began in 1998. Sales at grocery stores and other retailers are increasingly important to Starbucks, primarily because of its Via brand.

Starbucks says Kraft did not meet its responsibilities to work closely with Starbucks on marketing decisions and customer contacts. It said its decision to end the distribution agreement is consistent with terms of their contract, initially set to expire in 2014.

 

Shareholders OK merger of British Airways, Iberia

Shareholder approval for a $8.9 billion merger between British Airways PLC and Iberia SA to create Europe’s No. 3 airline was overshadowed Monday by the threat of new strikes at the British flag carrier.

The two airlines revealed at concurrent shareholder meetings in London and Madrid that more than 99 percent of investors had voted in favor of the merger, which the carriers hope will help counter falling demand from both business and leisure travelers in the wake of the global credit squeeze.

 

Output at Japan’s factories declines again in October

Japan’s factories cut production for the fifth straight month in October, the government said Tuesday, but the decrease wasn’t as bad as expected and a turnaround may be on the horizon.

Meanwhile, unemployment worsened slightly and consumer spending fell in October.

The current government is facing sinking approval ratings and has made job creation a priority, last week approving a new $61 billion stimulus package.

The Ministry of Economy, Trade and Industry said Tuesday that industrial production fell 1.8 percent, pulled down as makers of cars and electronic goods scaled back output.