Eurofirst gains on mergers, auto sector
The FTSE Eurofirst 300 was up 0.8 percent to 1,381.24 on Monday on new mergers and acquisition news and on gains in the automobile manufacturing sector.
The big news was the merger between French telecommunications equipment maker Alcatel and US peer Lucent Technologies. Alcatel was up 4.8 percent to €13.38 after it was announced on Sunday that it will purchase Lucent for $13.4 billion. The two companies had been talking merger for five years. In other news affecting Alcatel, French defence electronics company Thales gained 1.6 percent to €37.26 on the announcement that its board will meet Tuesday to explore closer ties with Alcatel, which already owns 9.5 percent of Thales.
In Spanish mergers and acquisitions news, construction company Acciona added 2.8 percent to €132.10 on rumors that it will try to acquire Abengoa, the engineering group. Acciona is up more than 40 percent since the beginning of the year.
Dutch chemicals firm DSM lost 1.8 percent to €37.01 after it said it had added to its stake in nutritional group Sciona. The move led UBS to cut its recommendation on DSM from “neutral” to “reduce”.
The European automobile manufacturing sector was taken higher by strong data on sales. After reporting that its sales in China was up 40 percent in the first quarter, Volkswagen added 2.7 percent to €63.99. China is VW’s second largest market. Meanwhile, Fiat was up 3.9 percent to €10.80 in anticipation of March’s Italian sales data, which is expected to show that the company’s sales grew faster than the overall market.