European Indexes Brave Greek Worries; Schneider in

Arthi Gupta
09 Jun, 2011
New York City

The European indexes traded higher ahead of the interest rate decision from the European Central Bank. Schneider Electric agreed to acquire China-based Leader & Harvest for $650 million. Stolt-Nielsen completed NOK 1.6 billion 5-year bond issue.

[R]2:00 PM Frankfurt – The European indexes traded higher ahead of the interest rate decision from the European Central Bank. Schneider Electric agreed to acquire China-based Leader & Harvest for $650 million. Stolt-Nielsen completed NOK 1.6 billion 5-year bond issue.[/R]

European indexes edged higher after the GDP in many nations in the euro-zone expanded in the first quarter. Markets in Asia traded lower for the sixth day tracking losses in New York for as many days. The global economic slowdown worries are taking hold around the world.

German Finance Minister Wolfgang Schaeuble wrote a letter to the ECB, IMF, the European Commission and finance ministers of the other euro-zone nations that Greece needed another disbursement of funds before mid-July.

A €110 billion bailout package was agreed last year for Greece and additional bailout between €60 and €90 billion may be needed as soon as this month.

He warned the euro-zone would face its first sovereign debt default if an agreement was not reached soon on a new program for Greece in order to close the financing gap and prevent default.

Greece’s annual consumer price inflation declined to 3.3% in May from 3.9% in April, data released by the Hellenic Statistics Authority showed today.

The Bank of England on Thursday left its key interest rate unchanged at a record low again at 0.5% and maintained the size of the quantitative easing at £200 billion.

In Paris CAC-40 Index gained 3.17 or 0.05% to 3,841.15 and in Frankfurt DAX index edged higher 15.96 or 0.23% to 7,076.19.

Schneider Electric Acquires Leader & Harvest

Schneider Electric S.A., the French energy management company agreed to buy China-based Leader Harvest Power Technologies Holdings Limited for an enterprise value of about $650 million or about €450 million.

The acquisition is expected to benefit Schneider, which is a leading player in low voltage drives, with a strong position in MV system drives in the Chinese market, which represents about 40% of the global MV drive market.

Stolt-Nielsen Completes Bond Issue

Stolt-Nielsen Limited announced today the successful placement of a NOK 1.6 billion or $300 million five-year senior unsecured bond issue. The bond issue carries a coupon of three-month NIBOR plus 4.75%.

The settlement date is expected to be June 22, 2011 and the maturity date June 22, 2016.

Gainers & Losers

Air France-KLM SA climbed 0.05% to €10.80 after Europe''s largest airline reported passenger traffic for May increased 4.9% from a year earlier, while cargo traffic declined 1.4%.

BMW AG rose 0.43% to €61.26 after the automobile manufacturer announced an additional £500 million investment in its UK production network over the next 3 years and confirmed that the UK would be a production location for its next generation MINI models.

Galapagos NV fell 0.95% to €9.38 after the Belgium-based biotechnology company initiated a Phase II clinical study for GLPG0634, a novel Janus kinase inhibitor developed for inflammatory conditions, such as rheumatoid arthritis.

Merck KGaA dropped 0.60% to €76.35 after the German chemical and pharmaceutical company said that the patient enrollment in the global Phase III clinical study CENTRIC has been completed. More than 500 patients have been successfully recruited into the global trial.

Separately, MDxHealth SA said it will extend its agreement with Merck KGaA for use of MDxHealth''s MGMT assay in Merck KGaA''s brain cancer clinical trials. Financial terms of the agreement were not revealed.

Novartis AG declined 0.79% to $62.52 after the Swiss drug giant announced that its candidate vaccine Bexsero showed significant potential in providing broad coverage against meningococcal serogroup B, or MenB, infections.

Rémy Cointreau SA gained 0.14% to €56.58 after the French alcohol maker reported fiscal 2011 sales rose 12.4% to €907.8 million compared with €807.6 million in the previous year. The company''s full-year group share of net profit declined 18.3% to €70.5 million compared with €86.3 million a year ago.

Net profit, excluding non-recurring items, for the full year increased 16.7% to €107.5 million from €92.1 million in the previous year.