European stocks rise on pharmaceutical shake-up

LONDON, Apr 22 (Agencies): European stock markets rallied in morning deals on Tuesday as shares in pharmaceutical groups surged owing to a major reshaping of the sector.
London's benchmark FTSE 100 index climbed 0.79 per cent to 6,677.55 points compared with Thursday's closing level -- the last trading day before European markets closed for Easter.
Frankfurt's DAX 30 jumped 0.95 per cent to 9,499.05 points and the CAC 40 in Paris advanced 0.52 per cent to 4,454.96.
The euro rose against the dollar.
"The pharma sector stood out (Tuesday)... on the back of news that two of the biggest players in the sector are making major changes to their business models," said Farhan Ahmad, a trader at TradeNext.
Swiss pharmaceutical giant Novartis and British group GlaxoSmithKline (GSK) announced a major shake-up of their healthcare divisions on Tuesday in deals worth billions of dollars.
It comes as reports over the weekend suggested that US pharmaceutical giant Pfizer was considering a $100 billion takeover of British rival AstraZeneca.
"Pharmaceutical stocks have had a shot in the arm ... on rumours of an impending takeover for AstraZeneca," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
In London deals, AstraZeneca's share price shot up 7.63 per cent to 4,070 pence and GSK rallied 5.42 per cent 1,643.55 pence.
Meanwhile, M&A talk in the pharmaceutical sector lifted European shares on Tuesday, but failed to support the euro, which held at a two week low against the dollar on rising expectations of further policy easing by the European Central Bank.
British newspaper Sunday Times said US pharmaceutical giant Pfizer had approached British rival AstraZeneca to propose a 60 billion pound ($101 billion) takeover. Both companies declined comment to Reuters.
Eli Lilly and Co said on Tuesday it would buy Novartis AG's animal health business for $5.4 billion in cash to strengthen and diversify its Elanco unit.
The FTSEurofirst 300 index of top European shares was up 0.5 per cent at 1,335.88 points, building on last week's gains on the back of largely better-than-expected results by US companies.
"We've got steady earnings coming out of the US, and the mergers and acquisition news doesn't do us any harm either," said Terry Torrison, managing director at McLaren Securities.