Euro-Zone Industrial Output Rises 0.8%

Arthi Gupta, Mayank Mehta and Sanjay Barot
14 Jun, 2010
New York City

European stocks extend gains for a fourth consecutive session after the euro area industrial output rose by 0.8% in April. The euro surges to an 11-day high. Resolution agrees to buy certain Axa operations in the UK for

[R]4:30 PM Frankfurt - European stocks extend gains for a fourth consecutive session after the euro area industrial output rose by 0.8% in April. The euro surges to an 11-day high. Resolution agrees to buy certain Axa operations in the UK for £2.75 billion.[/R]

In London FTSE 100 Index traded higher 27.44 or 0.53% to 5,191.12, in Paris CAC 40 Index increased 60.69 or 1.71% to close at 3,616.21, in Frankfurt DAX Index traded higher 75.75 or 1.25% to close at 6,123.58. In Zurich trading SMI Index increased 37.24 or 0.58% to close at 6,463.98.

Euro-zone''s industrial output growth exceeded expectations in April, according to data released from Eurostat today.

Industrial output increased a seasonally adjusted 0.8% on a monthly basis in April, slower than the 1.5% growth in the previous month, revised from the 1.3% rise reported initially.

Industrial production climbed 9.5% in April 2010 faster than the 7.7% growth in March 2009, which was revised from 6.9% estimated initially.

In EU27, industrial production rose 0.5% in April from the previous month and increased 7.8% compared to the preceding year.

Resolution Ltd., the insurance firm announced today a potential acquisition of French insurer Axa SA''s UK operations in the risk areas of protection and annuities as well as its group pensions business. The total consideration under discussion for the deal is £2.75 billion or $4.03 billion.

If the deal occurs, Axa will retain its Wealth Management and Direct Protection businesses and sell the remainder of its UK life & savings business to Resolution.

According to the UK-based company, which is a vehicle set up by insurance entrepreneur Clive Cowdery, the consideration is expected to be funded by a pre-emptive rights issue of about £2 billion by Resolution, £0.5 billion of Deferred Consideration Notes issued to Axa and also by acquisition of bank debt.

Resolution intends to merge the acquired Axa businesses with its Friends Provident operations, which were acquired in November 2009. The combined business is expected to have well-diversified distribution channels, through IFAs, direct sales, bancassurance and other sales partners.

Commenting on the potential deal, John Tiner, CEO of Resolution Operations LLP, said, ""This acquisition would build strong momentum in Resolution''s life assurance consolidation project and provides a range of options for further activity.""

Axa SA ((AXAHY.PK)) closed Friday''s trading session at $15.95, up from the prior close of 15.72, on 305,800 shares.

Resolution Ltd. ((RSL.L)) fell 0.20 pence or 0.33% and ended Friday''s trading session at 60.30 pence on 2.58 million shares

President Barack Obama said he wants BP to set up an escrow account to pay for damages for its oil spill in the Gulf of Mexico, according to media sources quoting White House adviser David Axelrod.

BP Plc is scheduled to meet regarding its dividend payout and has been contacted by the White House to set up an account for victims affected by the oil spill.

Italy''s toll highway operator Atlantia SpA has increased its stake in Brazil''s Triangulo do Sol to 60%.

Gainers & Losers

Alstom SA rose 4.3% to €39.22 after the power engineering and train company was upgraded to BofA Merrill Lynch Global Research’s “Europe 1” list.

Arcandor AG, the tourism and retail group fell 4.0% to €0.211.

AXA SA rose 1.4% to €15.95 after the insurance and financial service provider confirms that it is in discussions with Resolution Ltd regarding a potential transaction concerning part of AXA’s life & savings operations in the UK.

Bayerische Motoren Werke AG, the automobile manufacturer rose 1.7% to €40.76.

Bilfinger Berger AG, the construction and services group rose 0.7% to €48.40.

Continental AG, the automotive industry supplier rose 0.2% to €42.50.

Club Mediterranee SA, the vacation club operator and travel organizer rose 7.3% to €13.55. Fosun, China''s largest non-government controlled group, has acquired a 7.1% stake in the company.

Daimler AG, the luxury carmaker rose 0.9% to €43.13.

Fraport AG, the owner and operator of the international airport rose 1.1% to €36.40.

Michelin SCA rose 1.2% to €59.31 after the tiremaker was upgraded to “overweight” in new coverage at HSBC Holdings Plc.

MTU Aero Engines Holdings AG, the aircraft engine maker rose 1.4% to €49.97.

Pfleiderer AG, the producer and supplier of engineered wood products rose 8.4% to €3.99.

Renault SA, the car maker increased 3.0% to €31.56.

RWE AG rose 1.0% to €56.7.

Compagnie de Saint-Gobain SA, the construction materials and building products firm rose 2.1% to €33.56.

SMA Solar Technology AG, the maker of solar inverters fell 1.2% to €86.98.

TUI AG, the travel and shipping company increased 3.4% to €7.39.