By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks ended with meager gains
Wednesday, but BG Group PLC shares held to strong gains as the
energy producer agreed to a blockbuster merger with oil-and-gas
giant Royal Dutch Shell.
The Stoxx Europe 600 closed up 0.1% at 404.66, pulling slightly
higher as oil-and-gas, technology and health-care shares moved
The index had been above its record closing high of 405.50, set
in March 2000, but losses for the telecommunication, basic
materials and consumer-goods sectors prevented the pan-European
index from eclipsing that mark.
Still, the Stoxx 600 is up 18% this year, highlighting the
impact of the European Central Bank's EUR1.1 trillion
BG (BRGYY) surged more than 40% at the open of trade after news
Royal Dutch Shell PLC agreed to buy the energy producer for GBP47
billion ($69.6 billion) in cash and shares
BG confirmed it was in advanced talks with Shell following a late
Tuesday report from The Wall Street Journal.
London-listed BG shares closed higher by 26.7% at 11.53 pounds
($17.21). Shell (RDSB) shares, however, were slammed, with B-class
shares falling 8.6%. Read: Shell CEO: We didn't do BG deal because
of cheap oil
Talk about consolidation in the energy industry has ramped up
as a result of the slide in oil prices.
"We see decent strategic merit in this deal," which could offer
growth in Brazil and other benefits for Shell, said BNP Paribas in
a note. "We also think there may be some positive read across for
BP as well, which has been also been mentioned as a potential
target for one of the U.S. majors."
Shares of British oil major BP PLC (BP) rose 0.5%, ending off
The Stoxx 600's oil-and-gas group on Wednesday rose 2.5%, as a
number of energy-related shares were among the strongest advancers
in European trade. Portuguese oil-and-gas firm Galp Energia climbed
6.2%, Genel Energy PLC gained 6%, and Tullow Oil PLC tacked on
But the energy sector also pared gains after disappointing U.S.
oil supply data
sent U.S. oil futures (CLK5) and Brent crude futures sharply lower
late in the European session.
While BG Group shares soared in London, the U.K.'s FTSE 100
turned lower, ending down 0.4% at 6,937.41. France's CAC 40 also
turned lower, falling 0.3% to 5,136.86. Germany's DAX 30 lost 0.7%
to end at 12,035.86.
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