The Week That Was: BAE parachutes out of Airbus and targets America

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The Independent Online

BAE Systems' revelation last week that it plans to dispose of its 20 per cent stake in Airbus came as little surprise to the market. The holding in the European commercial aircraft maker has been looking marginalised as BAE turns its attention wholeheartedly towards America, the world's largest defence market.

It is clear that BAE will use the cash from the sale - by most estimates at least £3.3bn before a takeover premium - to buy further into the US, where it already earns nearly half its revenues. Merrill Lynch has identified at least 25 US groups that could make sense for the company. BAE's purchase of tank maker United Defense Industries last year has been a big success, but it remains to be seen whether it can make equally good use of the cash that will soon be burning a hole in its pockets.

Vodafone had a reshuffle as its chief executive, Arun Sarin, put Bill Morrow, the head of the recently sold Japanese business, in charge of the mobile phone giant's European operation. The appointment was part of a larger reorganisation as Mr Sarin tries to stem the fall of the company's stock. Under the new set-up, Vodafone will be split into three units: Europe, emerging markets and new technology.

What was good for Iceland's FL Group, owner of Icelandair, was bad for everyone's favourite orange travel company. FL pocketed a €140m (£97m) profit on Wednesday when it sold its 16.9 per cent holding in easyJet, sending the airline's shares down nearly 9 per cent. It managed to recover only slightly by the end of the week, despite reporting a 7.1 per cent rise in March traffic numbers. EasyJet's shares closed at 329.75p a share, down 6 per cent on the week.

While his countrymen were selling, Jon Asgeir Johannesson was buying. His investment firm, Baugur, bought a 9.48 per cent stake in House of Fraser just a week after the department store group's shares took a nosedive when it announced it had ended takeover talks with an unidentified bidder, thought to be Apax Partners. Its shares ended the week up 10.2 per cent.

The Serious Fraud Office, meanwhile, charged five pharmaceutical companies and nine executives on Thursday for allegedly defrauding the NHS out of more than £100m through price-fixing schemes.

On the same day, Lloyd's of London posted is first loss since 2001, when the US terrorist attacks pushed it into the red. The insurance market, battered by the particularly brutal US hurricane season, lost £103m last year, compared with a £1.37bn profit the year before. But with the winds and rain behind it, at least for a while, Lloyd's chairman, Lord Levene, said that the most pressing order of business for the group was to update its archaic paper-based operations, which he said were still in the "dark ages".

DSG International was another well-worn British company to acknowledge the passing of time last week. The country's largest electronics retailer said that the Dixons name would pass from the high street after 69 years. The storefronts will be renamed Currys.digital.

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