Business and City in Brief

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RBS pays pounds 46m for Banesto stake

Royal Bank of Scotland is to pay pounds 46m for a 2 per cent stake in Banesto, the Spanish banking group that was sold to Banco Santander after it was rescued earlier this year.

Santander already has a 10 per cent stake in Royal, which in turn has 14 per cent of Santander.

Babcock losses

Babcock International Group has confirmed that it plunged from pre-tax profits of pounds 21m to losses of pounds 41.2m in the year to 31 March and is not paying a final dividend as was foreshadowed at the time of the company's announcement of a pounds 78.6m rights issue last month.

Airline deal

British Midland Airways has signed an agreement under which Air Canada passengers flying to Heathrow and on to Glasgow, Belfast, Edinburgh, Leeds, Bradford or Teesside will use Midland's internal flights.

Fight goes on

Stuart Lipton, chairman of Stanhope, said he would continue his attempt to overturn the acquisition by British Land of a 29.9 per cent stake in the struggling property company. He will appeal against a High Court ruling last week that he had no pre-emption rights over the former Olympia & York holding.

Joint venture

Smith & Nephew has agreed to set up a joint venture with California-based Advanced Tissue Sciences to develop and market cartilage tissue products. Product development will initially be directed to the knee joint, which represents a potential worldwide market of around dollars 1bn.

Reuters TV launch

Reuters will launch its television service for European financial markets on 2 June. The service will provide television coverage and specialist programming for the foreign exchange, debt and treasury financial markets.

Products recalled

Bayer is to recall Baygon anti-mosquito products sold since 1993 in Belgium, France, Spain, Portugal, Italy and Turkey. The element that helps to set alight the anti-mosquito substance is said to be defective and may catch fire.

Nabisco runs Royal

Nabisco International said it has acquired the remaining 50 per cent interest in Royal Brands, giving it full ownership of the Spanish food company. The purchase price and terms of agreement were not disclosed.

Honda in Mexico

Honda Motor Co will begin building a plant to manufacture cars in Mexico in July, the President's office said. The plant, to be located in El Salto in Jalisco state, will have an initial output of 15,000 units annually.

World Markets

New York: Interest rate worries weighed heavily on shares and by closing the Dow Jones Industrial Average had fallen by 40.46 points to 3,629.04.

Tokyo: Futures-linked selling pulled the Nikkei average down 75.51 to 19,786.96 in thin trade.

Hong Kong: Fears of higher interest rates in the US sent the Hang Seng index diving 198.57 points (2.3 per cent) to 8,421.7.

Sydney: Firmer commodity prices boosted mining issues and helped the All Ordinaries index to 2,009.3, a five-point gain.

Bombay: Continuing its revival, the index added 40.33 to 3,755.9.

Johannesburg: Political factors and a firmer gold price pushed the index up 125 points to 5,434.

Paris: Depression over the interest rate outlook sent the CAC-40 index down 18.8 to 2,139.42.

Frankfurt: Very quiet trade ahead of tomorrow's Bundesbank meeting lowered the DAX index 18.14 points to 2,218.88.

Zurich: A heavy fall in Roche shares led the Swiss Performance Index down 43.81 to 1,694.34.

London: Report, page 28.