European stocks touch a record high on Wednesday, after Royal Dutch Shell PLC agreed to take over BG Group PLC in the largest energy industry deal of 2015.
London-listed BG shares intraday were up 37% at £12.52 ($18.65).
The Stoxx Europe 600
SXXP rose 0.3% to 405.56, just
above its all-time closing high of 405.50 hit on March 6, 2000, says MarketWatch.
The move brings the pan-European index’s year-to-date gain to 18%, highlighting the impact of the European Central Bank’s €1.1 trillion asset-purchase program.
BG BG. BRGYY jumped more than 40% at the open of trade after news Shell has agreed to buy the energy producer for £47 billion ($69.6 billion) in cash and shares. BG shares intraday were up 37% at £12.52 ($18.65). Shell RDSB RDS.B shares were down 2.6%.
Consolidation in the energy industry was widely discussed.
“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. BP were higher by 3.3%.
The Stoxx 600’s oil and gas group SXEP on Wednesday leapt 5%.
Producer Tullow Oil PLC TLW jumped 9.9%, Portugal’s Galp Energia GALP climbed 8.8% and Sweden’s Lundin Petroleum AB LUPE tacked on 8.9%. Stock in Tenaris SA TEN TS which makes steel pipes used by energy companies, rose 4.9%.
The U.K.’s FTSE 100
UKX
which is heavily weighted with energy shares, rose 0.5% to 6,995.49.
France’s CAC 40 PX1 gained 0.3% to 5,166.61, but Germany’s DAX 30 DAX turned 0.2% lower to 12,102.43.
