Greek Debt Downgraded; LVMH Takes a Majority Stake In Bulgari

Arthi Gupta
07 Mar, 2011
New York City

The European indexes climb after euro-zone investor confidence rose in March. Ratings agency lowered Greece government bond ratings. LVMH acquired controlling stake in Italian-jeweler Bulgari. Daimler and Rolls-Royce are reportedly in talks to acquire Tognum AG.

[R]4:00 PM Frankfurt – The European indexes climb after euro-zone investor confidence rose in March. Ratings agency lowered Greece government bond ratings. LVMH acquired controlling stake in Italian-jeweler Bulgari. Daimler and Rolls-Royce are reportedly in talks to acquire Tognum AG.[/R]

European indexes opened higher and stayed in the positive zone after despite the steady gain in oil price. Greece debt rating was lowered but euro-zone confidence rose.

In Paris CAC 40 Index gained 25.20 or 0.63% to close at 4,045.41 and in Frankfurt DAX Index edged higher 80.64 or 1.12% to close at 7,259.54.

Moody''s Lowers Greece Ratings

Moody''s lowered Greece''s government bond ratings to B1 from Ba1 and assigned a negative outlook to the rating. The rating agency said there are significant risks associated with the implementation of fiscal consolidation measures.

Greece’s sovereign debt rating now is the same as one of the poorest nation Bolivia.

Euro-zone Investor Confidence Soars

An indicator of investor sentiment in the euro-zone rose to its highest level in nearly three-and-a-half years in March, latest survey showed today.

The Sentix investor sentiment index, an indicator of confidence around 900 investors, rose to a new high of 17.07 in March from 16.70 in February.

German Economic Growth Outlook Raised

The German economy is estimated to grow 3% this year and 2.3% next year, the Association of German Banks said.

In addition to exports, domestic demand is also contributing significantly to economic growth, chief economists at the country''s private banks said in a joint statement. It expects German exports to grow 8.1% this year and private consumption to increase 2%.

Estonia’s CPI Rises

Estonia''s consumer price inflation rose to 5.7% in February from 5.3% in January, Statistics Estonia said on Monday.

The increase in inflation was led by a 13.2% rise in prices of food and non-alcoholic beverages.

On a monthly basis, consumer prices climbed 0.6% in February due to higher prices of vegetables and fruits.

Swedish Budget Surplus Up

Sweden''s central government budget surplus increased to SEK 67.7 billion in February from SEK 43.9 billion a year ago, the National Debt Office said on Monday.

The higher-than-estimated surplus is due to revenue from the sale of shares in Nordea. In the beginning of February, the Swedish government sold shares corresponding to 6.3% of outstanding shares in Nordea, which resulted in revenue of SEK 18.9 billion.

Norway Industrial Production Declines

Norwegian industrial production declined 2.7% on a monthly basis in January reversing a 0.9% rise in December, Statistics Norway said on Monday. Annually, it dipped 6.4%.

Manufacturing output rose 0.6% on a monthly basis in January after easing 1% in December. On an annual comparison, output grew 3.3%.

Bulgaria Industrial Production Increases, Construction Drops

Bulgarian industrial production grew a working-day adjusted 9.3% during January as against the 5.2% growth recorded in December, data released by the National Statistical Institute showed today. The increase was the biggest since October 2008, when production grew 9.8%.

On a monthly basis, industrial output grew a seasonally-adjusted 3.2% in January reversing the 0.8% decline in December.

Bulgaria''s construction production dropped a seasonally-adjusted 12.4% annually in January compared to the 13.9% decline in December.

On a monthly basis, construction output edged lower 0.8% in January sharply slower than the 13.9% fall in December.

LVMH Acquires Controlling Stake in Bulgari

LVMH Moet Hennessy Louis Vuitton SA, the French luxury conglomerate is poised to buy Italian jeweller Bulgari after it agreed to buy a controlling stake from the Bulgari family.

The French company agreed to issue LVMH shares to the Bulgari family to the value of €1.87 billion in return for a 50.4% stake in the Italian company, and plans to make a tender offer for the remainder of the Bulgari shares, in a deal that values the company €3.7 billion.

LVMH said that it will issue 16.5 million shares in exchange for the 152.5 million Bulgari shares currently held by the Bulgari Family.

Daimler and Rolls-Royce in Talks to Purchase Tognum AG

Daimler AG, the German car manufacturer confirmed that it is in discussions about the possibility of acquiring the majority of Tognum AG in a joint offer with British engine manufacturer Rolls-Royce Group plc.

Daimler and Rolls-Royce plan to take equal holdings in Tognum. If the deal comes through, it is reportedly worth about €3 billion or $4.2 billion.

Daimler AG already owns a 28.4% equity interest in Tognum AG, a supplier of engines and powertrains for off-highway applications and of local power generators.

Genzyme Accepts Sanofi-Aventis'' Offer

Genzyme Corp., the biotechnology firm unanimously recommended to its shareholders to accept the latest revised offer from the France based Sanofi-Aventis SA and to tender their shares into offer.

Sanofi-Aventis offered to acquire all outstanding shares of Genzyme common stock for $74.00 a share or $20.1 billion in cash in mid-February. Genzyme shareholders will also receive one Contingent Value Right entitling to additional cash payments on achieving specified milestones.

Gainers & Losers

ING Groep NV gained 0.563% to €8.930 after the Dutch financial services company said it intends to exercise its option for early repurchase of €2 billion of the core Tier 1 securities from the Dutch government.

Koninklijke Ahold N.V. rose 1.11% to €9.52 after the international food retailer said it commenced €1 billion share buyback program announced on March 3 and added that it is expected to be finalized within 18 months.

London Stock Exchange Group Plc dipped 0.11% to 888.50 pence after the diversified stock exchange group in Europe is considering a takeover bid for its U.S. rival Nasdaq OMX Group Inc., according to a report in the Sunday Times.

Salzgitter AG declined 2.13% to €56.64 after the German steelmaker said its fiscal year 2010 sales rose 6% to €8.30 billion from €7.82 billion in 2009. Pre-tax earnings in the period were €48.9 million compared with a loss of €496.5 million last year. Full-year earnings after tax amounted to €30.0 million as against a loss of €386.9 million in the year earlier period.

Societe Generale dropped 0.68% to €47.19 after the French lender received clearance from Lebanon''s central bank to buy Lebanese- Canadian Bank.