Europe Higher on DaimlerChrysler Deal

Ivaylo
14 May, 2007
New York City

European markets got a boost from deal news on Monday morning, with shares in car company DaimlerChrysler and pharmaceutical Merck standing out as investors eyed some potentially transformational transactions. DaimlerChrysler advacned after the carmaker chose private-equity firm Cerberus as the finalist in the bidding for its Chrysler unit. The German DAX Xetra 30 index added 0.5%, the French CAC-40 index rose less than 0.1% and the U.K. FTSE 100 index increased 0.2%.

[R]6:30AM European markets gain on Monday on deals involving DaimlerChrysler, Merck.[/R]

European markets are higher on Monday morning. The German DAX Xetra 30 index added 0.5% at 7,516.24, the French CAC-40 index rose less than 0.1% to 6,052.92 and the U.K. FTSE 100 index increased 0.2% at 6,578.80.

Advancers

In merger-and-acquisition news, DaimlerChrysler, the world fifth-largest carmaker, rallied or 7.8%. The Stuttgart, Germany-based automaker said private-equity firm Cerberus Capital Management LP will buy 80.1% of the U.S. Chrysler Group for 5.5 billion euros, or $7.5 billion.

Elsewhere in the sector, Porsche rose 1% and Volkswagen gained 0.4%. Over the weekend, Volkswagen recommended rejecting a takeover offer from Porsche, as many had expected.

Merck KGaA jumped 3.9% after it agreed to sell its generic drug unit to Mylan Laboratories Inc. Deals were also a focus for other sectors. Shares in U.K. catering firm Compass Group gained 1.7% after Compass agreed to sell its European vending business, Selecta, to a company managed by Allianz Capital Partners for 772.5 million pounds, or $1.5 billion.

Decliners

Rio Tinto, the world third-largest mining company, declined 2.1%, while HSBC, the region largest bank by market value, fell 0.9%.

Commodities

Crude oil for June delivery rose as much as 70 cents, or 1.1%, to $63.07 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for June settlement gained as much as 67 cents, or 1%, to $67.50 a barrel on ICE Futures exchange. Gold opened in London at $672.70, up from $671.90 late Friday. In Zurich, the bid price was $670.95, up from $668.30. Silver opened in London at $13.19, down from $13.22.

Currencies

The dollar was mixed against other major currencies in European trading Monday morning. The euro traded at $1.3539, up from $1.3535 late Friday in New York. The British pound traded at $1.9808, down from $1.9829. The dollar stood at 120.29 Japanese yen, up from 120.23 yen.

[R]5:30AM Corn, soybeans and wheat surge Friday, gold advances on bargain-hunting.[/R]

May corn advanced 15.25 cents to finish at $3.61 a bushel, July corn rallied 14.75 cents to $3.6925 a bushel. July soybeans gained 15.5 cents to close at $7.6175 a bushel, and November soybeans climbed 15.25 cents to $7.9075 a bushel. July wheat closed 11.5 cents higher at $4.93 a bushel, Kansas City Board of Trade July wheat rose 5 cents to $4.7675 a bushel.

June gold climbed $5.30 to finish at $672.30 an ounce, July silver added 16.5 cents to $13.305 an ounce, July platinum rose $17.50 to $1,341.70 an ounce, and June palladium futures ended $4.90 higher at $368.65 an ounce. The most-active July copper contract rose 3.75 cents to settle at $3.6040 per pound.

Crude oil for June delivery gained 56 cents, or 0.9%, to finish at $62.37 a barrel, the highest settlement for a front month contract since May 3. Front-month June gasoline futures advanced 2.6 cents, or 1.1%, to close at $2.3521 a gallon. June heating oil rose 1.98 cents, or 1.1%, to $1.8823 a gallon. Natural gas for June delivery finished at $7.899 a million British thermal units, up 17.3 cents or 2.2%.

On the New York Board of Trade, Arabica coffee futures declined, with July closing 0.85 cents lower at $1.0570 a pound, and September finishing 0.90 cents weaker at $1.0850 a pound. Futures on raw sugar in foreign ports ended higher, but they stayed in the week''s trading range. July sugar settled 0.03 cents higher at 9.29 cents a pound. Most-active July cocoa rose $13 to settle at $1,935 a metric ton.