Tony Hayward, the boss of BP, said the company would honor all "legitimate" claims for damages in the wake of the oil spill in the Gulf of Mexico. Existing U.S. law would cap BP's liability at $75 million, but there have been calls for a retroactive change that could see it rise to as much as $10 billion.
UAL, the parent company of United Airlines, and Continental Airlines announced that they will merge in an all-stock deal worth about $3 billion. Assuming it gets the go-ahead from competition regulators, the new company, to be called United Continental Holdings, will be the world's largest airline by passenger numbers. Consolidation in the aviation industry is being driven by continued losses. Airlines lost a combined total of $9.4 billion in 2009 according to IATA, an industry association.
Despite fears of a sovereign debt contagion, BNP Paribas, UBS and Société Générale all reported healthy quarterly profits. BNP's profits rose by 47 percent while UBS, one of the biggest victims of the crisis, said that it had made a first-quarter profit of $1.8 billion. Another embattled bank, Société Générale, made $1.4 billion, compared with a $354 million loss last year. Both BNP and SocGen also detailed manageable exposures to Greek government debt.
Australian mining companies may have to dig deep after the government announced plans for a new 40 percent tax on their profits. Shares in companies such as Rio Tinto and BHP Billiton, both partly Australian-owned, slumped after the news. The country expects to raise $8.1 billion each year from the move.
Norsk Hydro, a Norwegian aluminium producer, has agreed to buy a majority stake in the aluminium operations of Vale, a Brazilian mining firm, boosting its production in the country by over 2,000 tons a year. Vale will receive $1.1 billion in cash and a 22 percent stake in Norsk Hydro in a deal valued at $4.9 billion.
Pearson, a media company that partly owns the Economist, is to sell its stake in Interactive Data Corporation to two private-equity firms in a deal worth $3.4 billion. The publisher plans to focus on its education business.
Manufacturing output in America grew in April, according to the Institute for Supply Management, in further evidence of a prolonged recovery in the sector. In Britain, a survey by Markit found that manufacturing output and exports are growing at their fastest rate in 15 years.
Political economy After a parliamentary vote, Belgium was poised to become the first European country to ban women from wearing Islamic veils that cover the face, such as the burqa or niqab. The French National Assembly is to debate a possible burqa ban shortly, and legislation may follow.
