Crucell, J&J Deal; Carrefour Surges 5%

Arthi Gupta
17 Sep, 2010
New York City

The European indexes fell after euro area current account deficit remained flat and construction output fell in July. German PPI rose 3.2% in August. Carrefour SA surged 5% after the retail giant plans to invest about

[R]4:00 PM Frankfurt – The European indexes fell after euro area current account deficit remained flat and construction output fell in July. German PPI rose 3.2% in August. Carrefour SA surged 5% after the retail giant plans to invest about €1.5 billion in hypermarkets.[/R]

U.S. and Asian markets gained.

Portugal PPI slackened in Aug. Johnson & Johnson negotiated to buy additional stake for Crucell for €24.75 per share.

In Paris CAC 40 Index decreased 5.24 or 0.14% to close at 3,731.06 and in Frankfurt DAX Index edged lower 8.49 or 0.14% to close at 6,241.16. For the week, the CAC 40 Index declined 0.2%.

Johnson & Johnson, the healthcare giant announced today that it is in advanced negotiations for a potential public offer for all outstanding shares of the Dutch biopharmaceutical company, Crucell N.V., not already held by it, for a purchase price of €24.75 per share.

Johnson & Johnson currently holds nearly 17.9% of Crucell shares. As per the terms of the negotiations, Johnson & Johnson would acquire all outstanding equity of Crucell for about €1.75 billion in cash.

The euro area current account deficit remained unchanged in July, logging a shortfall for the seventh straight month.

The current account deficit on a seasonally adjusted basis in July was €3.8 billion, the European Central Bank said in a statement today. The shortfall for June was revised to €3.8 billion from €4.6 billion.

The 12-month cumulated seasonally adjusted current account deficit was €49.8 billion in July, 0.6% of euro-are GDP compared to a deficit of €130.4 billion a year ago. The reduction in the current account deficit was predominantly due to a decrease in the income deficit.

Euro-zone construction output declined a seasonally adjusted 3.1% on a monthly basis in July, compared to a 1.8% rise in June, according to a report published by the Eurostat today. The construction output in June month was revised lower from 2.7% increase estimated previously. Output decreased 0.9% in May.

Compared to a year ago, the construction decreased 7.5% in July against a 1.9% growth in June, which was revised from 3.1% rise estimated initially. Building construction fell 7.9% in July, following a 4.6% rise in June. Civil engineering declined 6% in July, compared to a 6.5% fall in June.

In EU27, on a monthly basis, the construction output fell a seasonally adjusted 2.5% in July, compared to a 2.6% rise in June. Annually, the construction output dropped 2.3% in July.

The economic expectations for Central and Eastern Europe declined in September, according to a survey conducted among the financial market experts by the Centre for European Economic Research ZEW and the Erste Group Bank. The corresponding index slipped 3.2 points.

Riksbank Deputy Governor Lars E. O. Svensson said during a speech in Tokyo and published on the bank''s Web site that policy rates high enough to have a noticeable impact on asset prices will have a strong negative effect on inflation and resource utilization.

""The use of the policy rate to prevent an unsustainable boom in house prices and credit growth poses major problems for the timely identification of such an unsustainable development,"" Svensson said.

Germany''s producer price measure of inflation slowed more than expected in August, according to new figures released today.

Statistics office Destatis said the producer price index rose 3.2% in August from a year ago compared to the 3.7% increase in July. Intermediate goods prices increased 5.6% compared to a year ago, while energy prices rose 4.8% in August. Excluding energy, producer prices rose 2.5% annually.

Compared to July, producer prices were unchanged in August. Prices had climbed 0.5% in July.

Portugal''s producer price index rose 3.9% year-on-year in August compared to a 4.2% growth in the previous month, according to a report released by the Statistics Portugal today. Producer prices increased for the ninth consecutive month. A year earlier, the PPI slipped 5.5%. On a monthly basis, the PPI rose 0.3% in August, same as in July.

Shareholders of Italy''s Fiat SpA voted to approve the company''s plan to separate its truck and tractor business from its car making operations. The demerger will see the car business being kept as Fiat SpA, which will include the Fiat, Alfa Romeo and Lancia brands as well as the 20% minority stake in Chrysler Group LLC.

The company will demerge its truck and tractor business as a newly incorporated company, Fiat Industrial SpA, which will include Iveco trucks and Fiat Powertrain Industrial and Marine as well as CNH Global NV (CNH), a subsidiary of Fiat Netherlands Holding N.V. The company expects the demerger date to be January 1, 2011.

Gainers & Losers

Aeroports de Paris rose 1.2% to €59.85 after the French airport operator reported a 1.4% increase in passenger traffic for August from a year earlier.

ArcelorMittal fell 0.52% to $32.52 after the steel producer reaffirmed its third quarter EBITDA guidance in a range of $2.1 billion to $2.5 billion.

Balfour Beatty Plc rose 1.69% to 264.90 pence after the international infrastructure group announced that the National Roads Authority appointed the company as preferred bidder for the £250 million N17/N18 Gort to Tuam PPP roads scheme in the Republic of Ireland, in consortium with the Royal BAM Group.

BP plc dropped 0.13% to $38.22 after the oil and gas explorer reported that the Development Driller III relief well intersected the Macondo oil well in the Gulf of Mexico on Thursday night.

Carrefour SA surged 5.02% to €40.17 after the retail giant plans to invest about €1.5 billion over 2 1/2 years to reinvent its hypermarket format in Western Europe.

Castle Alternative Invest AG gained 0.15% to $13.30 after the Swiss investment company entered into an agreement with its largest shareholder, Swiss Life, under which it intends to effect a reduction of capital and Group restructuring.

Centrica Plc climbed 0.65% to 343.20 pence after the utility company reached an agreement with A/S Norske Shell and Enterprise Oil Norge AS to acquire its non-operated interests in the gas and oil producing Statfjord field in the Norwegian sector of the North Sea, and its associated satellite fields, for a total cash consideration of Norwegian kroner 1.37 billion or about £144 million.

ThyssenKrupp AG edged higher 0.93% to €23.23 after the technology holding company said its Marine Systems segment, Abu Dhabi MAR and the Greek government have agreed to a deal to sell a majority stake in Hellenic Shipyards unit.