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Market Update

European Markets Down with Oil Nearing 2011 Low

Author: Lucy Stoeva
Last Update: 11:46 AM ET December 14 2015

4:00 PM Frankfurt – European markets turned lower after crude oil resumed its slide and reached 2011 prices in London and in New York. Industrial production in the euro zone was ahead of expectations. AstraZeneca is in preliminary talks to acquire cancer drug developer Acerta Pharma for £3.3 billion.

After a strong start, European markets turned lower in the afternoon and slid in negative territory.

The fifth consecutive day of losses came amid concerns about declining oil prices, which overshadowed a stronger than expected industrial production report.

Brent crude oil sank to $37.30 a barrel in London, down 8.5% in a week and 42.3% in the last six months and for the year so far has plunged 42%.

Industrial production in the euro zone increased more than expected after two months of declines.

In October, industrial production grew 0.6% in the euro zone and 0.5% in the EU28, compared with the previous month.

On an annual basis, industrial production in October rose 1.9% in the euro zone and 2.4% in the wider EU28 region, Eurostat reported.

In London trading, FTSE 100 index rose 29.52 or 0.5% to 5,968.23 and in Frankfurt the DAX index fell 91.23 or 0.9% to 10,243.75.

In Paris, CAC 40 index slid 14.48 or 0.3% to 4,535.08.

AstraZeneca Plc gained 0.2% to 4,337.50 pence after the pharmaceutical maker confirmed that it is in preliminary talks with Dutch cancer drug developer Acerta Pharma BV for £3.29 billion.

Benchmark Holdings Plc declined 4.8% to 88.55 pence after the U.K. food and farming technology and services provider agreed to acquire Belgium nutrition and health products maker INVE Aquaculture Holding BV for about £227 million in cash and stock.

The deal will be partly-funded by a £185.7 million share placing.

RPC Group Plc jumped 2.7% to 784.50 pence after the U.K. packaging company agreed to acquire Global Closure Systems, a maker of closures and dispensing systems for about £469 million.

RPC plans to raise £232.6 million through a fully underwritten 1-for-5 rights issue at 460 pence per share.

The transaction is expected to close by the end of March 2016.

Veolia Environment VE SA increased 2.4% to €21.62 after the French waste and water treatment firm announced that dividend payments will increase in the next three years as a result of higher revenue and lower costs.

The utility company proposed a dividend of €0.73 per share for fiscal 2015, up from €0.70 a year ago. The dividend payout will climb by about 10% annually to 2018.

Veolia expects revenue to climb by 2% to 3% annually over the next three years and to reach more than €27 billion in 2018.

Recurring net income is forecast to exceed €800 million in 2018, compared with an estimate of €550 million for 2015.

“We begin a new plan for the 2016 to 2018 period, which is based on a return to growth,” CEO Antoine Frerot said. The company plans to have a better balance between municipal and industrial clients and stronger growth outside of Europe.

Vinci SA edged up 0.03% to €57.66 after the French engineering construction company, through its subsidiary Vinci Airports, signed an agreement with Advent International to acquire Aerodom, which operates six airport in the Dominican Republic.

The transaction is expected to close by the end of the first-quarter of 2016.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc