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
up.
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
asset-purchase program.
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
(http://www.marketwatch.com/story/shell-to-buy-bg-group-in-696-billion-deal-2015-04-08).
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
(http://www.marketwatch.com/story/shell-ceo-bg-deals-not-a-bet-on-oil-price-2015-04-08)
Talk about consolidation in the energy industry has ramped up
(http://www.marketwatch.com/story/whos-the-next-target-for-oil-ma-after-the-shell-bg-deal-2015-04-08)
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
session highs.
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
5.4%.
But the energy sector also pared gains after disappointing U.S.
oil supply data
(http://www.marketwatch.com/story/oil-prices-ease-ahead-of-us-inventory-data-record-saudi-output-2015-04-08)
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
(http://www.marketwatch.com/story/ftse-100-pushes-higher-with-bg-rallying-on-shell-takeover-deal-2015-04-08)
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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