European shares climb back to six-week high

European shares rose on Monday, with merger and acquisition activity in focus and investor sentiment buoyed by expectations that a US tax bill could soon pass.

Thales rose 8.4 per cent after the French aerospace and defence company agreed to buy chipmaker Gemalto for 4.8 billion euros. Gemalto shares rose 5.4 per cent.

Euro zone blue chips added 1.1 per cent and the UK's FTSE rose 0.5 per cent, reports Reuters.

Unilever slipped 0.2 per cent after the consumer goods group agreed to sell its margarine and spreads business to US private equity firm KKR for 6.8 billion euros to concentrate on faster-growing products.

Baader Helvea analyst Andreas von Arx said the deal was expected and its terms roughly in line in expectations.

Also in M&A news, German real estate group Vonovia agreed to buy peer Buwog in a cash deal valuing it at 5.2 billion euros and sending the Austrian firm’s shares up 17 per cent to the top of the STOXX 600.

Among outstanding fallers, IG Group (IGG.L) was down 9.0 per cent after the European Union’s securities watchdog proposed curbs on core parts of its market.

H&M fell 4.7 per cent, staying under pressure after a series of price target cuts that followed a disappointing trading update last week.

The STOXX is up more than 7.0 per cent so far this year and remains below a two-year peak hit at the start of November on profit taking and resurfacing worries over political risks in the region.

Sentiment was supported on Monday by expectations that US lawmakers will pass a tax bill in the coming days or early next year.

Vestas shares were up nearly 5.0 per cent as the bill preserves key tax credits that had been at risk of being removed.