Magna Wins Opel Stake; European Markets Up

Mayank Mehta
10 Sep, 2009
New York City

European markets advanced and traded at the high for the year. Major indexes in the region are trading at 13-month high. GM agreed to sell majority stake in Opel to Magna International and Russian bank Sberbank. Arcandor may receive little after the banks sold their holdings in Thomas Cook.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European stocks advanced in the region and traded at the high for the year. Major indexes in the region are trading at 13-month high. GM agreed to sell majority stake in Opel to Magna International and Russian bank Sberbank. Arcandor may receive some proceeds after the banks sold their holdings in Thomas Cook.[/R]

European markets traded near highest level for the year and the Bank of England left its asset purchase plan in place and did not revise its key lending rate. GM, German government and Opel agreed to sell a majority stake in the European automaker to Magna International.

In London FTSE 100 Index closed lower 16.62 or 0.33% to 4,987.68, in Paris CAC 40 Index decreased 1.82 or 0.05% to close at 3,705.87, in Frankfurt DAX index higher 20.51 or 0.37% to close at 5,594.77. In Zurich trading SMI increased 6.39 or 0.10% to close at 6,208.43.

General Motors agreed to sell its European car division Opel to Canada based Magna International Inc. Magna along with Sberbank of Russia has agreed to acquire 55% stake in the struggling automaker. German government has offered €4.5 billion loan to Magna to complete the merger. GM will retain 35% stake in the automaker and employees will receive the remaining 10% stake in the company.

Opel employs 25,000 people in Germany.

Gainers & Losers

Arcandor AG the tourism and retail group closed unchanged at €0.22 after three creditor banks sold stakes in Thomas Cook.

Thomas Cook Group Plc increased 4.6% to 256 pence after the creditor banks to Arcandor sold the seized stake in the tour operator to meet the debt obligations to the bank.

Royal Bank of Scotland, Bayerische Landesbank and Commerzbank sold together 376.6 million shares and raised £904 million or $1.5 billion or 240 pence a share price.

ASML Holding N.V increased 6.6% to €21.45 after the maker of semiconductor equipment said it expects sales to exceed €500 million in both the third and the fourth quarters and third quarter bookings to come in significantly above that level.

Bilfinger Berger AG jumped 4.0% to €46.55 after the jewelry and accessories designer was upgraded to “buy” from “hold” at Equinet AG.

Carrefour SA fell 1.0% to €31.22.

Commerzbank AG edged higher 4.8% to €8.90 said still expects to reach its profit targets. The Company reiterated its goal of returning to profit by 2011 or sooner.

Deutsche Bank AG advanced 1.5% to €49.62.

Dexia SA increased 2.3% to €6.03 after the Belgian-based bank expects its earnings to improve progressively over 2009, its chief executive said Thursday, ruling out the possibility of a tie-up in the near future.

Groupe Eurotunnel SA soared 19.0% to €5.69 after the channel tunnel operator was upgraded to “outperform” from “underperform” at Cheuvreux SA.

Hannover RE the reinsurer fell 0.2% to €29.92.

Infineon Technologies AG the maker of semiconductors added 3.9% to €3.95 and Aixtron AG the maker of machines to coat semiconductors rose 1.5% to €15.30.

Remy Cointreau SA decreased 1.3% to €28.88 after the production and distribution of wines and spirits was downgraded to “underperform” from “neutral” at Bank of America Corp.

Rubis SCA increased 2.8% to €61.00 after the distributor of liquefied petroleum gas said first-half of the year 2009 total sales fell 16% to €456.9 million. Net income rose 11% to €27 million.

SAP AG climbed 2.1% to €34.93 after the business-management software developer stressed cost control at Citigroup technology conference in New York.

STMicroelectronics N.V added 2.8% to €6.64 after the global independent semiconductor said Texas Instruments Inc raises its forecast for third quarter earnings and sales saying it expects to ride a gradual recovery in the global semiconductor industry.

ThyssenKrupp AG rose 2.3% to €23.95 after the steelmaker was upgraded to “buy” from “hold” at RBS. In addition, SIAG Schaff Industrie AG acquired ThyssenKrupp Nordseewerke at the shipyard in Emden, Germany. Schaff will employ 721 of 1,200 workers. The company builds submarines and cargo vessels. Schaaf recently acquired wind turbine tower maker in Tennessee, U.S.A.

DAX Index Movers

Adidas AG led the decliners in the DAX index of 3.17% followed by losses in Commerzbank AG of 2.64%, in BASF SE of 1.61%, in MAN SE of 1.60%, in Deutsche Boerse AG of 1.10%.

Merck KGaA led gainers in the DAX index with a rise of 3.03% followed by increase in Siemens AG of 2.51%, in Thyssenkrupp AG of 2.15%, in SAP AG of 1.63%, in Deutsche Post AG of 1.24%.
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CAC-40 Index Movers

Accor SA led the decliners in the CAC-40 index of 2.64% followed by losses in BNP Paribas SA of 2.31%, in Vivendi SA of 2.23%, in Michelin SA of 1.76%, Carrefour SA of 1.30%.

Vallourec SA gainers in the CAC-40 index with a rise of 5.46% followed by gainers in EADS NV SA of 4.36%, Electricite de Strasbourg SA of 4.05%, in Veolia Environnement SA of 2.85%, in Schneider Electric SA of 2.01%.