S&P 500 2,441.20 17.28
Gold$1,224.80 $5.30
Nasdaq 6,253.81 61.92
Crude Oil $60,490.00      $-1570.00
Market Update

European Markets Rebound, Sanofi and Boehringer in €18 B Deal

Author: Lucy Stoeva
Last Update: 11:11 AM ET December 15 2015

4:00 PM Frankfurt – Stock markets in Europe regained strength fueled by gains in oil prices and overshadowed the weakness in the bond market for the third day in a row. Metro jumped on a surge in net profit. UBM agreed to divest PR Newswire for $841 million.

European stocks staged a comeback on Tuesday, ahead of the Federal Reserve meeting in the U.S., widely anticipated to raise interest rates for the first time in nine years.

Weakness in bond market in New York for the third spread to the stock and bond markets in the euro zone.

Nearly $2 trillion worth of bonds are issued to oil companies since 2010 and many of these shale gas producers are struggling with the recent plunge in oil prices.

A slight rebound in oil prices from five-year low also supported the gains in Europe.

While a U.S. rate hike to 0.25% to 0.50% indicates a stronger economy, there are ongoing concerns that higher rates would slow down the growth and would affect the U.S. corporate debt market and the euro zone government bonds.

Crude oil price in London, which have been falling for three weeks due to oversupply worries, rose on bargain-hunting. U.S. crude-oil prices gained 1.3% to $37 a barrel.

In Europe, preliminary employment data indicated growth of 0.3% in the euro zone and 0.4% in EU28 for the third quarter from the previous quarter, according to Eurostat.

In the U.K., annual inflation consumer prices increased 0.1% in November, compared to a decrease of 0.1% in October, according to the Office for National Statistics.

Producer prices in the U.K. declined 1.5% in November, compared to a decline of 1.4% in October.

In London trading, FTSE 100 index jumped 100.33 or 1.7% to 5,974.49 and in Frankfurt the DAX index soared 225.86 or 2.2% to 10,365.37.

In Paris, CAC 40 index advanced 90.55 or 2% to 4,562.93.

Metro AG increased 2.1% to €27.62 after the German wholesaler reported sales in the year ending in September dropped 1.2% from a year ago to €59.2 billion.

Net profit in the year surged to €672 million, compared to €127 million a year ago, and earnings per share jumped to €2.06 from €0.39.

Sanofi SA soared 4.6% to €78.13 after the French healthcare products maker and the Germany-based Boehringer Ingelheim GmbH were in exclusive talks to swap assets with total value of €18.1 billion.

Boehringer agreed to pay €4.7 billion for Sanofi’s animal health business, while Sanofi would acquire Boehringer’s consumer healthcare unit, excluding the Chinese operations.

The valuation of Sanofi’s animal-health business is about €11.4 billion, while Boehringer’s consumer healthcare business is worth approximately €6.7 billion.

Schneider Electric SE fell 0.3% to €52.25 after the French electricity distribution group confirmed that it had terminated the discussions to acquire the British engineering software provider AVEVA Group Plc.

Previously, Schneider had offered to invest £550 million in Aviva’s software business and to acquire a 53.5% stake valued at £1.3 billion.

AVEVA Group Plc stock tumbled 34.2% to 1,425 pence.

  1  2
Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc