European Markets Turn Lower; Molson Coors in

Arthi Gupta
03 Apr, 2012
New York City

The European indexes pared gains on concerns of global economic growth. Spain struggles to contain public debt as jobless rate increased in March. Molson Coors agreed to acquire StarBev for

[R]3:30 PM Frankfurt – The European indexes pared gains on concerns of global economic growth. Spain struggles to contain public debt as jobless rate increased in March. Molson Coors agreed to acquire StarBev for €2.65 billion.[/R]

European indexes pared gains on global growth worries and the expectations of rising Spanish debt in the current year. China reported manufacturing expansion but the elevated crude oil and commodities prices are expected to take bite out of the consumer spending in emerging markets and in the euro zone.

The Spanish finance ministry said the country’s total debt-to-gross domestic product ratio will rise to 79.8% in 2012 from 68.5% last year. Adding to the nation’s woes is the jobless data.

Last week, the country pledged to reduce its deficit by €27 billion and reach its revised debt-to- gross domestic product ratio to 5.3% for 2012.

The purchasing managers'' index for the Chinese service sector rose to a six-month high of 58 in March from 48.4 in February, according to a report published by the China Federation of Logistics and Purchasing.

The Reserve Bank of Australia retained the benchmark cash rate unchanged at 4.25% for a third consecutive month.

In Paris trading, the CAC-40 Index fell 23.70 or 0.7% to 3,439.21 and in Frankfurt the DAX Index edged lower 17.13 or 0.2% to 7,038.22.

Italian 10-year bond yield climbed seven basis points to 5.15% and yield on similar Spanish government bonds rose eight basis points to 5.40%.

Euro-zone PPI Eases

On a monthly basis, the industrial producer price index eased 0.6% in February following a 0.8% gain in January. And in the wider region of EU27, the industrial producer price index rose 0.8% in February compared to the 0.6% gain in January.

Spanish Jobless Rate Climbs

The number of unemployed in Spain rose 0.82% or 38,769 to 4.75 million in March from February, data from the Labor Ministry showed today. In February, unemployment rose by 112,269.

Spain''s jobless rate was the highest in the European Union in February at 23.6%, according to data from Eurostat released yesterday.

Molson Coors to Acquire StarBev

Molson Coors Brewing Company, the Canadian-American beer maker agreed to acquire StarBev L.P. from private equity investor CVC Capital Partners Limited for €2.65 billion or $3.54 billion.

With this acquisition, Molson Coors aims to increase its portfolio of premium brands and deepen its reach into growth markets around the world.

Gainers & Losers

Lonza Group AG soared 3.1% to Sfr48.54 and the Swiss chemicals and biotech products maker elected Richard Ridinger as the company''s new chief executive officer.

Roche Holding AG rose 0.1% to Sfr161.20 after the Swiss pharmaceuticals and diagnostics holding company’s sweetened acquisition bid of $51 a share in cash was rejected by Illumina Inc. stating that the revised offer still undervalues the company.

UCB SA climbed 3.1% to €34.88 after the biopharmaceutical firm said the U.S. Food and Drug Administration approved Neupro for the treatment of the signs and symptoms of advanced stage idiopathic Parkinson''s disease and as a treatment for moderate-to-severe primary Restless Legs Syndrome.

Volvo Treasury AB increased 0.8% to SEK 98.65 after the Sweden-based supplier of commercial transport solutions signed a €1.2 billion multi-currency revolving credit facility, replacing the company''s existing $1.4 billion revolving credit facility signed in May 2006.