* EDF gains, reaches deal on renewables tax
* Saint-Gobain climbs on stake sale news
* Swatch shares up, buys Harry Winston jewellery arm
By Tricia Wright
LONDON, Jan 14 European shares were flat on
Monday, steadying after a recent strong run, with French energy
firm EDF the top gainer after it reached a deal with
the government over a tax levy shortfall.
The FTSEurofirst 300 was trading at 1,163.15 points
by 1218 GMT, just shy of a two-year high after gaining almost 3
percent during 2013, led on Monday by a 5.1 percent rise from
Comments from a top Federal Reserve official about the
outlook for the U.S. economy proved supportive to sentiment.
Chicago Fed President Charles Evans said the U.S. central
bank's decision last year to tie monetary policy to specific
economic conditions should help boost the recovery without
letting inflation take hold.
Sentiment could also be driven by a speech later in the day
from Fed Chairman Ben Bernanke, with markets looking for any
further indications of how long the central bank's latest bond-
buying programme will last.
Merger and acquisition activity played a part in supporting
European shares on Monday, in a trend which some strategists
reckon is set to continue.
Saint-Gobain rose 2.4 percent, reversing recent
losses, after the group said it has received a $1.7 billion
offer from Ireland's Ardagh Group for the North
American business of its Verallia unit.
"This is very positive, as the price tag represents 30
percent of the total EBITDA (earnings before interest, taxes,
depreciation and amortisation) of Verallia, implying that the
same multiples for the rest of the business would value the
whole Verallia at 4.3 billion euros, way above the estimates
when Saint-Gobain was planning to list 40 percent of the
business," a Paris-based trader said.
Swiss luxury firm Swatch Group, meanwhile, added
2.9 percent, buoyed by news it is buying the luxury jewellery
arm of Canada's Harry Winston in a $750 million cash
deal to expand into high-end bracelets, rings and necklaces.
"I think M&A activity will continue to be a driver of
markets during the course of 2013," Henk Potts, market
strategist at Barclays, said.
"The reality is companies I think will find it hard to grow
organically. Companies are awash with cash and I think they're
quite willing to spend that money."
But European postal service operators were under pressure
after United Parcel Service Inc said it would drop its
5.2 billion euro ($7 billion) bid for peer TNT Express
on the expectation of a European Commission veto.
Shares in the Dutch delivery firm plunged almost 42 percent.
The euro zone's blue-chip Euro STOXX 50 rose 0.2
percent to 2,723.77, having hit a fresh five and a half month
high in earlier trade on Monday.