By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- These stocks made notable moves in European trade Friday.

Balfour Beatty PLC shares surged 9.1% as the construction and services company said it is in preliminary merger talks with rival Carillion PLC . Carillion shares gained 7.2%.

British Sky Broadcasting Group PLC shares pulled back 5.5% after the broadcaster said it will pay 4.9 billion pounds ($8.3 billion) to buy Sky Italia and a 57.4% stake in Sky Deutschland from 21st Century Fox Inc. (NWS). The deal paves the way for BSkyB to create a pay-TV business across Europe.

LVMH Moët Hennessy Louis Vuitton shares dropped 6.8% after the luxury-goods firm said first-half profit fell 4%, highlighting the sector's exposure to fluctuations in foreign-exchange rates.

Shares of Royal Bank of Scotland Group PLC leapt 11% as the company said it expects pretax profit of GBP2.65 billion for the first half of the year, compared with GBP1.37 billion in the year-ago period. Second-quarter net profit fell on charges.

Vodafone Group PLC gained 2.1%, with the mobile-phone industry heavyweight saying there's signs of stabilization in some key European markets, even as quarterly revenue grew at a lower-than-expected pace.

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