UK retail giant on Qatar’s radar?

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Marks and Spencer
Marks & Spencer store at 42 High Street, Birmingham. Qatar’s sovereign wealth fund is rumored to buy UK retail chain Marks & Spencer in deal worth estimated to be US $12 billion.

A news report by London’s The Sun newspaper has revealed that Qatar’s sovereign wealth fund may be eyeing UK retail chain Marks & Spencer in deal worth estimated to be USD 12 billion.

The retail giant boasts about 1000 global stores, also maintaining presence in the UAE and Saudi Arabia. Marks & Spencer employs about 80,000 people all over the world. Latest financial results of the company show a 9.7 percent decline in profit to the six months up to the end of September 2012. However, sales have increased by 0.9 percent to GBP £4.7 billion during this period.

Although The Sun has not revealed its source, shares of the retail chain climbed on Thursday and Friday amid speculation of a buy-out. Founded in 1984, Marks & Spencer is listed on the London Stock Exchange and is a constituent of the FTSE 100 index.

In recent years, gas-rich Qatar has bought several British assets including 80 percent of Western Europe’s tallest building, The Shard, Harrods, Barclays Bank and the US embassy building. These ownerships have been led by Qatar Investment Authority (QIA), world’s 12th largest sovereign wealth fund with assets worth more than USD 100 billion. The QIA also owns an 8.7 percent stake in US jeweler Tiffany & Co, 26 percent stake in supermarket Sainsbury’s and 3 percent stake in oil company Total.

Last year, the government of UK welcomed any further investment by the Gulf state, especially in infrastructure-related projects. The QIA is keen to takeover large retail chains in the consumer-based UK economy, which is struggling to make a comeback after the global financial crisis. While Qatar is smaller than Belgium in size, the Gulf state has vowed to increase its global influence and become a dominant player in the world’s political and economic arena.

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