European stocks had their first weekly gain this year as Alcoa Inc and Aluminum Corp of China's (中國鋁業) purchase of a stake in Rio Tinto Group and Microsoft Corp's offer for Yahoo Inc fueled speculation mergers will increase.
Rio Tinto posted its biggest weekly gain since November after Alcoa and Chinalco, bought a ?7.2 billion (US$14 billion) stake in the world's third-biggest mining company. France's Societe Generale SA climbed after BNP Paribas SA said it's considering a bid. Mitchells & Butlers Plc advanced after saying suitors have expressed interest in buying the pub owner.
"These are signals for the market that industrials are ready to seize opportunities to consolidate," said Benoit de Broissia, who helps oversee US$7.4 billion at Richelieu Finance in Paris. "Valuations are attractive."
The Dow Jones STOXX 600 Index advanced 1.9 percent to 328.41 this week, snapping a seven-week losing streak. The STOXX 50 gained 1.7 percent, and the Euro STOXX 50, a measure for the euro region, climbed 2.4 percent.
The STOXX 600 currently trades at 11.4 times the average earnings of its members following its worst-ever January. As of last Friday, the gauge traded at 11.2 times average profit, the lowest since at least January 2002, data compiled by Bloomberg show.
US Federal Reserve Chairman Ben Bernanke reduced the benchmark interest rate by half a point to 3 percent on Wednesday, eight days after an emergency three-quarter point move, the fastest easing of monetary policy since 1990. The Fed left the door open to more cuts by saying in its statement that "downside risks to growth remain."
"The Fed is going to cut and cut to save the economy," said Philip Manduca, who helps manage about US$500 million at Titanium Capital Ltd in London. "Bernanke knows he'll cut more. He's been late, but boy is he going now. He's catching up."
National benchmarks rose in all of the 18 western European markets except Norway, Austria and Greece. Germany's DAX Index added 2.2 percent. France's CAC 40 climbed 2.1 percent. The UK's FTSE 100 gained 2.7 percent.
Rio Tinto jumped 19 percent for its biggest weekly gain since Nov. 9. Alcoa and Chinalco bought the stake in a surprise attempt to derail BHP Billiton Ltd's hostile bid for Rio. Chinalco and Alcoa don't intend to make an offer for Rio after buying the 12 percent stake on the market.
"Further upside exists in Rio shares," said Michael Rawlinson, an analyst with Liberum Capital Ltd in London. "With the goal of ultimately blocking the deal, further stake building by Chinalco/Alcoa is likely to occur at higher levels."
Raw materials shares gained the most among the 18 industry groups in the STOXX 600, soaring 11 percent. That's the industry's steepest weekly climb since the period ending on Aug. 24.
Microsoft, the world's biggest software maker, on Friday made an unsolicited offer to buy Yahoo for about US$44.6 billion, or US$31 a share. The offer is 62 percent more than Yahoo's closing stock price a day earlier, a Microsoft statement said. Yahoo shareholders can choose cash or stock, Microsoft said.
Societe Generale climbed 19 percent. BNP Paribas, France's biggest bank, on Thursday said it is considering a bid for its smaller rival. Credit Agricole SA, France's second-largest bank by assets, is appointing advisers to explore a possible bid for Societe Generale, according to four people involved in the discussions. Societe Generale last week said a trader's unauthorized bets led to a record loss.
Mitchells & Butlers surged 15 percent. The owner of the O'Neill's pub chain said on Wednesday an undisclosed number of suitors expressed interest in a takeover.
Private equity firms TPG Inc, CVC Capital Partners Ltd and Cinven Ltd are among the suitors that approached Mitchells & Butlers, the London-based Times reported on Friday, without citing anyone.
Meinl European Land Ltd soared 41 percent. The Austrian developer that lost 52 percent of its market value last year had its biggest ever gain on Wednesday after saying it's in talks with "several" potential bidders.
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
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