The energy sector saw gains in Europe on Wednesday as the FTSE Eurofirst 300 added 0.2 percent on the day’s session, to 1,546.70. Mergers and acquisitions rumors and news drove the gains.

Endsea and Eon were both higher after Endsea said Tuesday that Eon’s bid, worth €41 billion, was “adequate” and recommended it to shareholders, who will meet to vote on the bid in late March. Endsea added 0.4 percent to €38, while Eon was 0.7 percent higher to €111.46. Eon’s domestic rival RWE added 1.2 percent to €84.22 after it said it will not enter a gas and electricity price war with Eon.

Rumors circulated that France’s Electricite de France was going to bid for Iberdrola. While EdF denied the rumors, EdF and Iberdrola each gained 2.9 percent, to €56.60 and €34.97 respectively. Elsewhere in the sector, Gas Natural added 1.8 percent to €32.92 and Union Fenosa was 4.1 percent higher to €41.63.

In the semiconductors sector, Infineon added 10.7 percent to €11.96 after it said it had concluded a deal with Finnish mobile phone maker Nokia to supply chips for its low-cost phones.

Swiss drug maker Roche dropped 2.1 percent to SFr233.50 even though it reported that profits were up 36 percent for the full year. Investors did not seem impressed with the report, which was in line with expectations, nor with the outlook for 2007, which said that Roche expects lower sales during the year for Tamiflu, its flu drug.

The automobile manufacturing sector saw declines on the session. Peugeot fell 0.5 percent to €51.90 on a lower operating margin last year. The decline was not as much as feared, however. BMW was 2.4 percent lower to €45.43 after German insurer Allianz said that it will sell 16.1 million shares in the luxury carmaker.

Mergers and acquisitions rumors once again helped European equities see gains on Monday as the FTSE Eurofirst 300 added 0.6 percent to 1,429.95.

The airlines sector was mixed on the session. On an announcement by the Italian government that it will reduce its stake in Alitalia to less than 30 percent, from the 49.9 percent that it now holds, the Italian air carrier added 2.4 percent to €0.96. Air France-KLM, which recently said that it is in preliminary talks with Alitalia concerning a possible merger, dropped 0.7 percent to €30.30. Analysts for Citigroup, however, felt that it would be more likely that domestic bidders would be interested rather than foreign carriers such as Air France or Lufthansa. Lufthansa was nonetheless 2.4 percent higher to €19.95 when Morgan Stanley reaffirmed its “overweight” rating and lifted the carrier’s target share price from €18.20 to €25.

In the utilities sector, Spanish power generators were up on rumors that the government could hike electricity tariffs by 10 percent in 2007. If this turns out to be the case, it would be largest increase in the tariffs in 20 years. Endsea was 0.4 percent higher to €35.15, while Iberdrola added 1.5 percent to €33.48 and Union Fenosa gained 2.7 percent to €39.94.

Also in Spain, property group Inmocaral purchased 15 percent of builder FCC from Acciona. FCC added 3.6 percent to €75.20 and Inmocaral was 5.7 percent higher to €5.38. Acciona, which did not say how it would use the €1.53 billion it will receive for the transaction, gained 0.4 percent to €131.50. Some analysts expect that Acciona will use the money to buy more of a stake in Endsea as part of an attempt to foil Germany’s Eon from acquiring Endsea. Eon was 1.5 percent higher on the session, to €95.90.

The FTSE Eurofirst 300 added 1.9 percent during the week to close at 1,396.45 on Friday, driven largely by activity among Spanish stocks. The activity made Spain’s IBEX-35 index the top performer in Europe over the week with a 4.4 percent gain to 12,934.7. The IBEX was as high as 13,001.6 at one point on Friday.

In the utilities sector, Endsea added 14.4 percent over the week to close at €33.55 on the news that Acciona had purchased a 10 percent stake in the utility and was thinking of buying more. This move was seen as a potential deal-breaker for the proposed Endsea/Eon merger. Eon, the German utility, reacted by raising its bid by 38 percent, but that sent it to a loss of 2.7 percent on the week to €93.48 as investors feared a bidding war. Acciona, on the other hand, was 5.9 percent higher on the week to €120.

Meanwhile, Iberdrola added 9.4 percent over the week to €35.30 after construction group ACS said that it had become the largest shareholder in the power generator with a 10 percent stake. Dresdner Kleinwort said that the purchase by ACS could protect Iberdrola from foreign takeover attempts. It was also seen as a step toward a merger between Iberdrola and Union Fenosa. The activity sent Union Fenosa 0.3 percent higher to €40.28, while ACS added 2.9 percent to €37.40.

Also in Spain, this time in the construction sector, Sacyr Vallehermoso gained 13 percent during the week to €35.85, largely on speculation that it would be a bids target. The rumors had ACS as a possible bidder, but most analysts dismissed the talk.