Daimler Swings to Profit, Heineken Net Up; Clariant Buys S

Arthi Gupta
16 Feb, 2011
New York City

European indexes gained on earnings and two large deals. Danish banks'' ratings lowered. Sanofi agreed to acquire Genzyme for $74 a share and Clariant purchased S

[R]4:00 PM Frankfurt – European indexes gained on earnings and two large deals. Danish banks'' ratings lowered. Sanofi agreed to acquire Genzyme for $74 a share and Clariant purchased Süed-Chemie for $2.7 billion. French leading economic index rose in December. Pfeiffer Vacuum sales up 21%. Eni and Heineken earnings rise.[/R]

Jens Weidmann, chief economic adviser to Chancellor Angela Merkel, is expected to be appointed as the Bundesbank chief to replace Axel Weber, reports said on Wednesday citing sources.

In Paris CAC 40 Index gained 39.16 or 0.95% to close at 4,149.50 and in Frankfurt DAX Index edged higher 17.72 or 0.24% to close at 7,417.76.

Moody''s Lowers Danish Banks'' Ratings

Moody''s Investors Service on Wednesday cut its long-term rating of five Danish banks, citing the government''s willingness to allow depositors and senior creditors of the country''s banks to take losses in bankruptcies.

The move comes after the bank Amagerbanken collapsed and was put under state-control earlier this month.

The long-term ratings of Danske Bank A/S, Spar Nord Bank A/S, FIH Erhvervsbank A/S, Ringkjobing Landbobank A/S and BankNordik P/F were downgraded.

Europe New Car Registrations Drop

European new car registrations fell 1.4% in January from the same period of last year, the European Automobile Manufacturers'' Association said on Wednesday.

This follows a 12.6% rise in December. New registrations reached a total of 1.04 million vehicles.

French Leading Economic Index Rises

The Conference Board Leading Economic Index for France rose 0.8% in December to 111.9 from a 0.3% fall in November.

The Conference Board''s coincident index, a measure of current conditions, rose 0.2% to 104.6 in December, after a 0.3% increase in November.

Spanish GDP Rises

The Spanish gross domestic product rose 0.2% sequentially in the December quarter, a final report from the National Statistics Institute confirmed a flash estimate released on Friday.

On an annual basis, GDP climbed 0.6% in the final quarter of 2010 following the 0.2% growth in the third quarter.

In the year 2010, the economy contracted 0.1% compared to 2009.

Italian Current Account Deficit Widens

Italy''s current account deficit widened to €5.38 billion in December from a €214 million shortfall in the same period of 2009, the Bank of Italy said on Wednesday.

Portugal Jobless Rate Climbs

Portugal''s unemployment rate climbed to 11.1% in the fourth quarter of 2010 from 10.9% recorded in the third quarter, latest data from the Statistics Portugal showed on Wednesday.

The jobless rate for males increased to 10.1% from 9.6%, while that for females edged down to 12.3% from 12.4%.

The average unemployment rate in 2010 was 10.8%, up from 9.5% in 2009.

Sanofi-Aventis Acquires Genzyme

Sanofi-Aventis agreed to acquire U.S. biotechnology firm Genzyme Corp. for $74 per share in cash or about $20.1 billion. Following the combination, Genzyme would become Sanofi''s global center for excellence in rare diseases.

Under the deal, each Genzyme shareholder will also receive one Contingent Value Right, or CVR, entitling to additional cash payments on achieving specified milestones.

According to the company, the milestones are related to Genzyme''s key multiple sclerosis drug Campath, generically known as alemtuzumab and to be branded as Lemtrada, or production volumes in 2011 for enzyme replacement therapies Cerezyme and Fabrazyme to treat Gaucher and Fabry diseases respectively

Clariant Buys Süed-Chemie

Clariant agreed to buy German specialty chemicals firm Süed-Chemie AG in a deal with an enterprise value of €2 billion or 2.5 billion Swiss francs.

As part of the agreement, Clariant agreed to buy One Equity Partners'' 50.4% stake and family shareholders'' about 46% stake in the company, resulting in slightly above 95% in total.

The shares of One Equity Partners will be bought at a price of €121 per Süed-Chemie share, while Süed-Chemie family shareholders will swap their shares into Clariant shares at a ratio of 1:8.84.

Gainers & Losers

Clariant AG slumped 12.14% to Sfr15.34 after the Switzerland-based company engaged in the specialty chemicals sector said fourth quarter sales dipped 0.6% to Sfr1.70 billion from Sfr1.71 billion a year ago. Net income in the quarter amounted to Sfr47 million compared to a net loss of Sfr67 million in the prior year.

Daimler AG slumped 3.04% to €54.28 after the German car maker reported fourth quarter revenue grew 24% to €26.4 billion from €21.32 billion last year. Net profit in the quarter was €1.14 billion or 0.99 euros per share in comparison with a loss of €352 million or 0.34 euros per share last year, driven by strong unit sales and revenue growth. The company now projects “significantly higher earnings” in 2011.

Eni S.p.A. fell 0.33% to €18.34 after the integrated energy company reported fourth quarter net sales from operations increased 27% to €27.95 billion from €22.08 billion in the prior year. Net profit in the quarter increased 40% to €548 million or 0.15 euros a share from €391 million or 0.11 euros a share in the previous year.

Heineken N.V. surged 4.39% to €38.51 after the beer brewer said fiscal year 2010 revenue grew 9.7% to €16.13 billion from €14.7 billion s in the prior-year quarter. Net profit in the period rose 41.4% to €721 million or 2.63 euros per share from €510 million or 2.08 euros per share in the same quarter a year ago.

ING Groep NV dropped 1.06% to $12.09 after the Dutch financial services company reported fourth quarter net profit of €433 million or 0.11 euros per share compared to a loss of €712 million or 0.33 euros a share in the previous year. The turnaround reflected an improvement in banking operations, which offset a write-down in its U.S. Insurance business.

Pfeiffer Vacuum Technology AG 0.94% to €94.65 after the German manufacturer of vacuum pumps in its unaudited results for fiscal year 2010 reported that revenues for the year grew 21.1% to €220.5 million from last year.

Societe Generale SA soared 5.15% to €51.38 after the French lender reported fourth quarter net income before minority interests soared 199% to €995 million compared with €333 million a year ago. Group net income surged 295% to €874 million from €221 million last year.

Net banking income in the quarter improved 34% to €6.86 billion from €5.13 billion in the previous year.