Dealmaking in focus as European shares make strong start

Dealmaking in focus as European shares make strong start
General view of the Frankfurt stock exchange, Germany, June 29, 2015. REUTERS/Ralph Orlowski
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MILAN (Reuters) – European shares rose in early trading on Monday with fresh merger and acquisition activity in focus and investor sentiment buoyed by expectations that a U.S. tax bill could pass soon.

Thales <TCFP.PA> rose 6.6 percent after the French aerospace and defence company agreed to buy chipmaker Gemalto <GTO.AS> for 4.8 billion euros. Gemalto shares rose 6.1 percent.

“It’s a healthy premium and it looks like the sort of deal the Gemalto board will be happy with,” said Chris Beauchamp, chief market analyst at IG.

Both stocks were among the biggest gainers on the pan-European STOXX 600 <.STOXX> index, which was up 0.8 percent by 0811 GMT, helped by gains across all sectors.

Euro zone blue chips <.STOXX50E> added 0.9 percent and the UK’s FTSE<.FTSE> rose 0.6 percent.

Unilever <ULVR.L> slipped 0.3 percent after the consumer goods group agreed to sell its margarine and spreads business to U.S. private equity firm KKR for 6.8 billion euros to concentrate on faster-growing products.

Among outstanding fallers, UK-based online broker IG Group <IGG.L> fell 12 percent after European regulator ESMA said it was considering measures to restrict offering of “speculative” products to retail investors.

The STOXX is up more than 7 percent so far this year and remains below a two-year peak hit at the start of November on profit taking and resurfacing worries over political risks in the region.

Sentiment was supported on Monday by expectations that U.S. lawmakers will pass a tax bill in the coming days or early next year.

(Reporting by Danilo Masoni; editing by Tom Pfeiffer)

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