Greece Approves Tax Reforms, Bayer Pursues Monsanto

Lucy Stoeva
23 May, 2016
New York City

European stocks recorded losses in a volatile session Monday. Economic activity in the euro zone slowed down in May, according to a private survey. Bayer AG offered to buy the U.S. based Monsanto for $62 billion. Fiat Chrysler may be prohibited from selling cars in Germany due to emission rules.

[R]4:00 PM Frankfurt, Germany – European stocks recorded losses in a volatile session Monday. Economic activity in the euro zone slowed down in May, according to a private survey. Bayer AG offered to buy the U.S. based Monsanto for $62 billion. Fiat Chrysler may be prohibited from selling cars in Germany due to emission rules.[/R]

European stocks recorded losses in a volatile session on Monday on disappointing economic data and losses in the shares of Bayer and Fiat Chrysler.

Economic activity in the euro zone slowed down in May, according to latest data by Markit. The euro zone composite purchasing managers’ index fell to 52.9 in May from 53 in April.

The euro dropped 0.11% against the dollar to 1.1207.

Fiat Chrysler Automobiles tumbled 4.4% on media reports that the Italian company could be prohibited from selling cars in Germany if evidence of disregard of emissions rules is found.

On Friday, Fiat rejected an invitation to meet with German transport ministry officials to discuss diesel emissions.

Bayer AG shed 3.5% after the German drug and chemical company made an offer to buy U.S. based Monsanto for $62 billion, or $122 a share.

Defying the trend, the stock market in Greece advanced after the approval of tax and austerity reforms in an effort to unlock bailout money from the EU.

Greece also started a new privatization fund and freed up the sale of non-performing loans in exchange of bailout loans and debt relief.

In London, the FTSE 100 index fell 13.78, or 0.22%, to 6,142.54, while in Frankfurt, the DAX index erased 30.97, or 0.71%, to 9,845.12.

In Paris, the CAC 40 index lost 30.97, or 0.71%, to 4,322.93.

In Milan, the FTSE MIB index underperformed, down 2.26%, to 17,410.54 after Fiat dragged down the Italian market.

The Athens Composite Index rose 1.54% to 970.92 on the reform news.

Fiat Chrysler Automobiles N.V tumbled 4.4% to €6.04 on media reports that the Italian company could be prohibited from selling cars in Germany if evidence of disregard of emissions rules is found.

On Friday, Fiat rejected an invitation to meet with German transport ministry officials to discuss diesel emissions.

The German transport minister Alexander Dorbrindt said the uncooperative behavior was completely incomprehensible.

Fiat said its vehicles were compliant with emissions regulations.

Bayer AG shed 3.5% to €86.46 after the German drug and chemical company made an offer to buy the agro-chemicals maker Monsanto for $62 billion, or $122 a share.

The deal values Monsanto at a 37% premium over the company’s May 9 closing share price.

Aixtron AG surged 15.1% to €5.51 after Fujian Grand Chip Investment Fund made a takeover bid that values the German technology equipment maker at €6 per share, or a total of €670 million.

Fujian Grand Chip Investment Fund is 51% owned by Zhendong Liu and 49% owned by Xiamen Bohao Investment Ltd.

The offer represents a premium of 50.7% on the three-month weighted average share price.

Aixtron said CEO Martin Goetzeler and COO Bernd Schulte would keep their positions after the takeover, which also wouldn’t affect its technology hubs in Germany, the U.K. and the U.S.

Cie. Financière Richemont lost 2.7% to 57.35 Swiss francs after its parent company Cartier warned of difficulties for the luxury market. On Monday, several analysts downgraded the stock.

Ryanair Holdings Plc rose 0.9% to €13.49 after the budget airline said annual sales grew 18% to €6.54 billion and profit climbed 43% to €1.24 billion in the latest fiscal year.

The number of passengers reached 106.4 million, setting a new record for the Irish company. The load factor, or the number of seats sold, reached 93%.

However, the airline said profit growth would slow this year as concerns about terrorism could push airfares further down. Profit is expected to rise 13% to about €1.4 billion.