European stocks advanced, paced by banks, after Santander Central Hispano SA said it expects to complete its takeover of Abbey National Plc in November. HVB Group and Commerzbank AG gained. ``This is going to be something that begins the process of consolidation,'' said Roger Nightingale, a global strategist at Sarasin Investment Management Ltd. in London, which manages $3.6 billion in assets. ``This changes tremendously the bank sector in Europe, where there are a lot of banks in Germany and France without operations abroad.'' The Dow Jones Stoxx 50 Index rose 0.4 percent to 2696.70 as of 11:41 a.m. in London. The Euro Stoxx 50, a measure for the 12 countries using the euro, added 0.3 percent. The Stoxx 600 also gained 0.3 percent.
The Stoxx 600's 70-member Banks and Financial Services sub- index has climbed 5.8 percent since Santander bid for Abbey on July 23, amid expectations the offer will spark further consolidation in the industry. The gain compares with a 3 percent rise in the broader index. Consolidating the financial industry could help banks in the European Union compete with larger U.S. rivals while boosting the overall economy, the Dutch government said in a paper presented to the region's finance ministers on Saturday.
Benchmarks Rise
Benchmarks rose in 16 of the 18 Western European markets. Germany's DAX Index rose 0.5 percent. The U.K.'s FTSE 100 Index gained 0.6 percent and France's CAC 40 Index advanced 0.2 percent. September futures on the Euro Stoxx 50 increased 0.2 percent. Santander said its purchase of Abbey, what would be Europe's largest ever cross border bank merger, should be completed on Nov. 12. Shares of Santander slid 1 percent to 8.17 euros. Abbey fell 5 percent to 579.25 pence, trimming the stock's advance since Santander's bid to 5.2 percent. HBOS, the U.K.'s biggest mortgage lender, said it won't bid for Abbey National, Britain's No. 2, which has agreed to an 8.7 billion-pound ($15.7 billion) takeover offer by Santander, Spain's largest bank by assets. Shares of HBOS Plc climbed 4.6 percent to 747 pence.
HVB Group, Germany's second-largest lender by assets, advanced 2 percent to 14.87 euros. Commerzbank, Germany's No. 3 bank by assets, rose 2 percent, to 15.10 euros. Banca Intesa, Italy's largest bank by assets, gained 1 percent to 3.06 euros.
Alitalia, Intercontinental Hotels
Alitalia SpA added 9 percent to 30 euro cents. Italy's unprofitable, state-controlled airline said it reached an agreement with pilots to increase work hours and reduce pay ahead of Wednesday's deadline set by Chief Executive Officer Giancarlo Cimoli, union officials said. The agreement will save Alitalia 52 million euros ($64 million) a year, the company said in a faxed statement. InterContinental Hotels Group Plc gained 2.1 percent to 634.50 pence. The world's largest hotel operator ousted CEO Richard North and said it will seek someone with more experience as it switches its focus to managing or franchising hotels instead of owning them. LVMH Moet Hennessy Louis Vuitton SA fell 0.3 percent to 55.10 euros. The world's largest luxury-goods maker said first- half net income rose 49 percent to 396 million euros ($484.4 million). Sodexho Alliance SA gained 4.6 percent to 22.14 euros. The world's second-largest caterer said Chairman and Chief Executive Officer Pierre Bellon will step down as CEO as of Sept. 1, 2005, and will be succeeded by co-Chief Operating Officer Michel Landel.
Gazprom
Gazprom shares traded in London rose 7.3 percent to 72.64 rubles, the highest since at least 1998, extending yesterday's 15 percent jump after the government announced a proposal for the company to buy state oil producer OAO Rosneft for $5.1 billion in stock. The purchase will boost the government's Gazprom stake to more than 50 percent while easing a ban on foreign ownership of Gazprom's Moscow-traded stock. Shares of Geberit AG, Europe's largest maker of sinks and toilets, rose 4.5 percent to 957 Swiss francs after Deutsche Bank AG published new research on the company. Deutsche Bank analyst Ken Kagerer declined to comment on the research or the rating when contacted by Bloomberg News. JCDecaux SA advanced 3.3 percent to 18.23 euros. The world's second-largest outdoor advertising company said first-half profit jumped 48 percent to 27.9 million euros as ad spending picked up in France and Germany.////www.bloomberg.com