The pan-European Euro Stoxx 600 index closed around 0.3 percent higher, led by food retailers Delhaize and Ahold. Shares of both the Belgium and the Dutch company surged on reports of merger talks.
Delhaize topped the Stoxx 600, closing up 14.5 percent, while Ahold was in third-place, ending 5.5 percent higher.
Read MoreAhold, Delhaize shares soar as merger rumors return
Elsewhere, Greece's reform talks with the Eurogroup of euro zone finance ministers, continued on Monday. The Greek government remains hopeful that the talks will lead to vital aid being released, which will enable the country to avoid default.
Reuters reported on Monday that Greece had paid around 750 million euros due to the International Monetary Fund on Monday, one day before the deadline. This was reported after Greek markets had closed, with the benchmark Athens Composite index ending down around 2.5 percent.
U.S. stocks traded in a narrow range on Monday, following a strong rally on Friday's jobs report, as investors awaited the week's data releases.
Asian stock markets advanced on Monday following China's decision to implement its third interest rate cut since November.