Confirmation of stories linking Germany's Viag and Algroup of Switzerland and speculation of another cross- border merger in the banking sector breathed life into both the Frankfurt and Zurich markets.
Viag, the diversified utility, had a volatile session on confirmation of rumours, in the market for several weeks, that it planned to merge operations with Algroup, the industrial group formerly known as Alusuisse.
The Viag shares initially shot up 3.6 per cent but later pulled back, closing down 20 deutschmarks on the day at DM1,065 on the view that the share-swap arrangements were more beneficial to the Swiss company.
No sooner had that rumour proved to be true than speculation emerged that Germany's Dresdner Bank was considering a link of its own with the Swiss CS Group. Dresdner was DM5.34 or 7.2 per cent higher to DM79.34.
The Xetra Dax index closed 91.22 higher at 5,159.21.
Paris ended up 35.41 at 3,950.94 on the CAC-40 index thanks to another strong session for Renault and a late bounce for BNP. Over the week, the benchmark put on almost 4 per cent.
Milan edged forward on blue-chip buying. The Mibtel index closed up 190 at 22,934.
Amsterdam rounded off a positive week on a subdued note with the AEX index up 0.91 at 1,135.60 for a five-day gain of 2.3 per cent.
Madrid ended at a three-month high after banks made further significant gains. The general index ended 8.22 or 1 per cent higher at 862.10, its highest close since August 20th.
