Summary
- European stocks surge on Wednesday
- DAX (DE30) reaches short-term resistance zone
- Bayer (BAYN.DE) sells animal health unit to Elanco
European stocks are unimpressed with a risk of new political crisis in Italy. Gains can be spotted all across the Old Continent on Wednesday with the Italian index FTSE MIB (ITA40) being the top performer. All 19 sector subindices from the Euro Stoxx 600 index are trading higher with carmakers, tech stocks and industrials rising the most.
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Wednesday’s surge brough DE30 to the short-term resistance zone ranging above the 11775 pts handle. In case an upward move is continued, one should pay attention to the 12100 pts handle, which acted as a floor for the index at the turn of July and August. Source: xStation5
Bayer sells animal health unit to Elanco
Elanco Animal Health, international company focusing on veterinary drugs, reached an agreement with Bayer (BAYN.DE) on the purchase of animal health unit. Such a move is in line with Bayer’s strategy to focus on core segments like life science and pharmaceuticals. The deal is valued at $7.6 billion and it breaks down to $5.3 billion and $2.3 billion in Elanco stock. Exact stock price will be determined upon transaction closing date but early estimates hint that Bayer may acquire an up to 20% stake in Elanco through the deal. Bayer announced that it will sell the equity stake over time. Once the transaction is completed, Elanco Animal Health will become the second largest company in veterinary drugs business with Zoetis (ZTS.US) being the only bigger rival.
DAX members at 10:00 am BST. Source: Bloomberg
Other company news
Commerzbank (CBK.DE), the second biggest private bank in Germany, considers closing some of retail branches in order to facilitate cost savings. According to the Handelsblatt report, the lender may reduce the number of retail branches by as much as 100-200. News agency also said that Commerzbank may present new strategy in October.
GEA Group (G1A.DE), the German company operating in the food industry, is trading today thanks to the upgrade it has received at Goldman Sachs. The bank raised recommendation for the stock from “neutral” to “buy” and the price target was boosted from €25 to €30. Goldman Sachs said that it sees as chance for the compound annual growth rate of earnings to reach 20% over the next 2.5 years. The Bank hailed the company's strong balance sheet and operational improvements.
Leoni (LEO.DE) also trades higher today after receiving an upbeat recommendation. HSBC upgraded the German cable manufacturer to “buy”. Price target was set at €11.75, implying 35% increase against yesterday’s close.
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