1:00PM New York, 6:30PM Frankfurt – European markets closed lower and OMX is acquired by Nasdaq.

Markets

European markets closed slightly lower at the end of the week ahead of Monday holiday in the U.K., the Netherlands, and Belgium. Norway led the decliners in the region with a loss of 1% followed by 0.7% decline in Belgium and 0.3% in Spain. Germany led the gainers in the region with a gain of 0.54% followed by a rise of 0.2% in Switzerland, Italy and France.

U.K. economy expanded in the first quarter at 2.9% according to the Office for Natioan Statistics, a government agency.

Merger and Deal News

Nordic stock exchange operator has agreed to be purchased by Nasddaq for $3.7 billion in cash. Nasdaq after two years of trying to acquire London Stock Exchange directed its attention to other exchanges. Sweden based OMX rose 11% to close at 199.5 swedish kronor. Nasdaq offered 94 kronor in cash and 0.502 shares of the new company valuing the company at 208.1 kronor the share of OMX.

The deal lifted other exchange operators in the region. Deutche Boerse AG operator of Frankfurt Exchange rose 2% and Bolsas & Mercados Espanoles advanced 3.6%.

Swiss company UBS AG has agreed to sell its 21% stake in Julius Baer and use the proceeds to buy back its shares. The company expects to receive nearly 4.1 billion Swiss francs for the sale.

Carrefour SA in Paris trading rose 2.3% to 54.6 euros on the speculation that shareholders Colony Capital and Bernard Arnault controlled companies may raise their stake and convince the founding family to sell their stake.

Spain based Iberian Air rose 3% to 3.95 euros on the news that the company has received information from suitor TPG Inc for the planned bid. Goldman Sachs has increased its stake in British Air to 5.1%, fourth largest shareholder, lifting the stock to 461 pence in the UK trading.

Gainers and Losers

Rising bond market yields in the region led to a sell-off in the utilities stocks. Utilities shares came under pressure in the UK trading. British Energy lost 2.1% to 575.5 pence and in Italy Enel SpA, largest energy company in the country, lost 0.7% to 8.4 euros.

Construction and building materials company sold-off as well in the region. UK based Balfour Beatty dropped 2.5% to 455 pence and CRH building materials company fell 2.3%.

Mining stocks rose in the day’s trading on higher nickel, copper and zic prices. Rio Tinto (RTP: chart) jumped more than 4%, Anglo American gained 1.2%, and Lonmim advanced 0.8%


11:30AM New York, Coca Cola share jumps 1.5% on largest acquisition in the company’s history.

Coca Cola (KO: chart) has agreed to purchase Energy Brands for $4.1 billion in cash. The laggard in the non-carbonated beverage market, Coca Cola is forced to make largest purchase in its history to compete in the bottled water market.

The beverage maker Energy Brands is also known as Glaceau is known for its products labeled as Fruitwater, Smartwater, Vitaminenergy and Vitaminwater. The brand has captured the imagination of health conscious consumers who want to quench their thirst and still avoid carbonated soda. The company is estimated by Beverage Digest to increase its case sales volume 103% to 77 million cases.

The company will acquire 70% stake now and 30% from Tata Tea, India based tea company. Tata controlled total of 30% stake in the company through its holding company Tata Sons and Tata Tea UK and has agreed to sell its stake in energy Brands one year later. Tata acquired the stake in the company a year ago for $677 million and will reap a nearly 100% gain on the sale. At the time Tata had reported to the press in India that Energy Brands is expected to generate $700 million in revenue in 2007.

Queens, New York based Glaceau will help Coca Cola to secure a position in the relatively fast growing bottled water market in the U.S. The company has been late in introducing bottled water in the U.S. and has lagged behind Pepsi and others. Pepsi controls nearly 45% of non-carbonated soft drink sales in the domestic U.S. market.

According to Beverage Digest, Coca Cola has maintained its market share leadership in the carbonated soft drinks channel with nearly 43% share followed by 32% share held by Pepsi and 14.6% share of Cadbury Schweppes. Coca Cola sold 4.4 billon of case volume in 2005 and for the year Pepsi sold 3.2 billion cases.

The purchase of Glaceau will reduce the share buyback plan announced by the company. The company is likely to reduce its purchase to $1.75 billion from $3 billion announced earlier this year.