European Indexes Slump; Deutsche Wohnen, United Internet Down

Arthi Gupta
16 Aug, 2011
New York City

European indexes slumped after euro area economic growth slowed more than estimated in the second quarter. German and French leaders will meet today in Paris to discuss the euro area debt crisis. AEGON decided to sell its UK-based Guardian life and pension business to Cinven for

[R]2:30 PM Frankfurt – European indexes slumped after euro area economic growth slowed more than estimated in the second quarter. German and French leaders will meet today in Paris to discuss the euro area debt crisis. AEGON decided to sell its UK-based Guardian life and pension business to Cinven for £275 million.[/R]

Traders turned negative ahead of the evening meeting between German and French leaders to discuss measures to tackle the euro-zone debt crisis.

French President Nicholas Sarkozy and German Chancellor Angela Merkel will meet in Paris later today to discuss measures to take the region''s sovereign debt crisis.

Euro-zone and German economic growth slowed more than estimated in the second quarter on the deteriorating sovereign debt crisis in the region.

Euro area gross domestic product rose 0.2% in the second quarter compared to the 0.8% expansion in the first three months of the year, data from the Eurostat showed today.

German GDP grew 0.1% on a seasonally adjusted basis in the second quarter following a downwardly revised 1.3% expansion in the first quarter, according to data released by the Federal Statistics Office.

In Paris CAC-40 Index declined 51.37 to 1.59% to 3,187.69 and in Frankfurt DAX Index edged lower 148.88 or 2.47% to 5,873.36.

Cargill Plans to Acquire Provimi

Cargill Inc., the producer and marketer of food and industrial products planned to acquire Provimi, the global animal nutrition company, for an enterprise value of €1.5 billion from the private equity firm Permira funds.

AEGON Sells Guardian Life and Pension Business

AEGON N.V., the Dutch insurer decided to sell its UK-based Guardian life and pension business for a total cash consideration of £275 million to Cinven, a European private equity group.

Also, AEGON Asset Management has entered into a long-term agreement with Cinven and will continue to manage the assets of Guardian which total £7.4 billion.

Union Bancaire Privée to Buy Swiss Unit of ABN AMRO Bank

Union Bancaire Privee, UBP SA and ABN AMRO Bank N.V. entered into an agreement whereby UBP will acquire ABN AMRO Bank (Switzerland) AG. The financial terms of the transaction will not be disclosed.

With this acquisition, UBP adds 20% to its overall assets under management and expands its core Swiss private banking business.

Gainers & Losers

Deutsche Wohnen AG dropped 5.42% to €9.77 after the German real estate firm reported second quarter revenues declined 2.2% to €74.22 million from last year''s €75.91 million. Profit for the quarter surged 186% to €8.49 million or 0.10 euros per share from €2.97 million or 0.04 euros per share last year.

EURO Resources S.A. gained 1.72% to €3.54 after the French company focused on precious-metal royalties reported second quarter net profit soared 80% to €4.46 million or €0.071 per share from €2.48 million or €0.040 per share for the second quarter of 2010.

Intercell AG surged 12.91% to €2.83 after the Austria-based vaccine-biotechnology company reported second quarter revenue grew 31.4% to €12.69 million from €9.66 million in the same period last year. Net loss in the quarter narrowed 81% to €1.61 million or 0.03 euros per share compared to a loss of €8.35 million or 0.17 euros per share reported in the prior-year quarter.

SOLON SE rose 1.28% to €1.66 after the solar module manufacturer said it will increase the focus of its North American activities on the project business, in conjunction with its group-wide restructuring program.

The company also said it will stop manufacturing solar panels in Tucson, Arizona by mid-October.

United Internet AG fell 4% to €12.23 after the Germany-based Internet service provider stated first-half consolidated sales grew 8.4% to €1 billion from €930.8 million in the previous year. Earnings before taxes for the period rose 22.9% to €144.2 million from €117.3 million last year.