European shares are higher amid bumper M&A news

European shares are higher Monday as a raft of mergers-related news outweighs disappointing earnings results.

European shares are higher amid bumper M&A news

European shares are in the green in the early afternoon Monday amid a raft of merger news which is working to outweigh some negative earnings results. The Telecom Italia row is continuing too, although investors are likely waiting until Friday’s board vote before making any bold moves.

By 1330 BST, the EUROSTOXX 600 was 0.08% higher, while the EUROSTOXX 50 gained 0.18%. Regional bourses were also higher. The German DAX was unchanged, the French CAC was up 0.29% and the Spanish IBEX was 0.32% in positive territory.

Mergers news

A number of merger announcements are proving supportive Monday.

Sainsbury’s shares surged 16.9% to £315.40 after it confirmed it had agreed a tie-up with Asda owner Walmart. The deal will create the largest supermarket group in the UK.

Accor shares are also in positive territory after the French hotel group announced it had agreed to buy Swiss group Movenpick Hotels & Resorts for €482 million. Accor shares rose 2.11% to trade at €46.93.

The purchase of Sprint by T-Mobile has given the latter’s parent company, Deutsche Telekom a boost Monday. The all-stock deal will create the third largest US wireless and telecoms business and also pave the way for some $40 billion in 5G investment.

Deutsche Telekom shares were higher during morning trade, however they have slipped into negative territory post midday.

Stock fallers

There were a number of notable fallers in Monday’s European trading session, helping to limit the M&A led gains.

Telecom Italia was among them, with its shares 0.85% in the red at €0.82 as the row over the board continues. TI’s CEO said over the weekend his position could become untenable if the Elliott backed board succeeds.

However, Elliott Advisors said Monday that they and their board candidates support Genish and his turnaround plan.

Other fallers include:

  • Swedish bank SEB shares slid 454% to SEK82.50 after reporting lower-than-expected Q1 earnings.
  • Tesco shares lost 0.80% to hit £236.20 in the wake of the Sainburys-Asda news.

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