European equities end lower – M&A and earnings season shape the picture

ABB and Rotork: Takeover in the spotlight

In focus during the morning was the quarterly report from Swiss industrial group ABB. The second-quarter figures released in the morning beat expectations, particularly on the order intake side. Nonetheless, ABB shares came under notable pressure, sliding 3.4 percent, after the group simultaneously announced the acquisition of UK automation specialist Rotork. ABB is offering roughly US$5.5 billion for the company, a price that ZKB analysts described as "stolz."

Rotork shares subsequently surged 66 percent. According to observers, however, the price also reflects the risk of a lengthy antitrust review and a lack of room for competing bids during ongoing takeover processes. Such takeover offers came thick and fast on Thursday: Uber, too, has now formally tabled its bid for Delivery Hero.

Delivery Hero reacts tepidly to Uber offer

Shares in the food delivery company barely reacted to the US ride-hailing platform's offer of €41.50 per share. Up just 0.6 percent at €38.42, the stock remained well below the bid price. According to analysts, the anticipated lengthy review by competition authorities and the lack of room for counterbids are capping further upside potential. The shares have already gained 69 percent since the start of the year.

Semiconductors and AI names under scrutiny

Semiconductor stocks sent mixed signals. ASML managed a 0.5 percent gain, while other names that had closed in the red the previous day after initially strong advances edged slightly higher again. Strong earnings and higher capex targets from Taiwanese chipmaker TSMC, however, provided little tailwind for AI stocks on Thursday. Several previously strong-performing AI names have lost momentum of late.

Nordic bank Nordea also presented its second-quarter figures. Barclays analysts had no complaints about the numbers but likewise found no major surprises. After initial heavier losses, the shares were last trading marginally in positive territory.

On the German market, photo services provider Cewe announced the acquisition of the instant photo business of Kodak Alaris. With the takeover, the photo services company aims to expand its core photofinishing business and its international retail presence.

Overall, investors are increasingly focused on how well companies are coping with current challenges during the ongoing earnings season. The majority of European sectors trended slightly weaker, without any major swings.