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Deal news excites bourses
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December 9, 1998: 1:24 p.m. ET
Zeneca and Astra announce merger while Ciba-Clariant deal falls apart
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LONDON (CNNfn) - European markets broke the recent downtrend Wednesday, but couldn't rid themselves of the lethargy that has dogged them all week.
A huge merger between drug makers Zeneca (ZEN) and Astra grabbed attention early in the session. After the close, though, came a shock announcement from Swiss chemical firms Ciba Specialty Chemicals and Clariant that they had called off their proposed merger.
The companies cited "major risks" that turned up in the due diligence process for blocking the deal.
In London, the FTSE 100 gained 1 percent to close up 53.4 points at 5,669.1.
In Paris, the CAC 40 inched up just 7 points to 3,772.61, and Zurich's SMI gained a paltry 4 points to 4,676.57.
Frankfurt's Xetra DAX moved lower, although by only 0.7 percent, or 31.62 points, to finish at 4,676.57.
Earlier, the spirit of cooperation had seemed alive and well in Europe, when Zeneca and Astra unveiled Europe's largest-ever merger.
Zeneca shares finished the day almost 8 percent higher at 2,755 pence. The deal dragged other merger candidates up in its wake. SmithKline Beecham (LSE:SB) which has seen two proposed partnerships blow up in its face, gained almost 5 percent at 799 pence.
Having got a taste for the speculative, investors returned to fledgling telecom stocks. Following bid action Tuesday the focus moved to Energis (EGS). The shares soared 12 percent to 1,232 pence. Colt Telecom (CTM) refused to be left out, gaining 4 percent to 848 pence.
Even oil giant Shell (SHEL) got caught up in the speculation. Vague talk of a merger with Chevron (CHV) of the U.S. sent Shell stock up 4 percent to 361 pence.
On more fundamental grounds, British Aerospace (BA.) rose 4 percent to 524 pence after TWA (TWA) announced it is buying 75 Airbus Industrie planes.
Rolls-Royce (RR.), which is getting an engine order from the same deal, gained 4 percent to 233 pence.
The strongest riser in the FTSE 100 was transport group Stagecoach (SGC). Whispers of a deal to be announced with its results Thursday, plus a broker's buy note, drove the shares up 10 percent to 242 pence.
In Zurich, Clariant and Ciba shares both were mildly lower, but with no hint of the dramatic news to come after the market closed.
UBS gained 9 francs to 397 francs on hopes of a recovery at collapsed hedge fund LTCM.
In Frankfurt, the market chose to focus on the perceived vulnerability of the dollar, rather than consolidation among pharmaceuticals companies.
In Paris, Thomson-CSF (PHO) jumped 6 percent to 215 francs on hopes the wheeling and dealing in the defense electronics sector is getting under way. Competitor/partner Lagardere (PMMB) gained 5 percent to 230 francs. 
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