European shares closed higher Monday, boosted by mergers and acquisitions activity, although bullish sentiment was capped by ongoing events in Ukraine.
The pan-European FTSEurofirst 300 Index provisionally closed higher by 0.2 percent to 1,335.83 points at the start of the week.
A slew of corporate activity helping to pull bourses higher, despite fresh sanctions against Russia being announced by the United States.
A potential $100 billion-plus merger of two of the world's biggest pharmaceutical companies moved a step closer after Pfizer confirmed it had made a second approach to U.K. rival AstraZeneca. AstraZeneca shares surged 14.2 percent on Monday and helped the FTSE 100 to close higher by 0.2 percent.
Meanwhile, General Electric's chief executive, Jeff Immelt, met French ministers on Monday to discuss the U.S. company's bid for Alstom, amid news of a rival bid from Siemens of Germany. Trade in Alstom shares issuspended until Wednesday, but Siemens shares fell around 2.7 percent on Monday.
U.S. stocks rose sharply on Monday, with equities bouncing back after the prior session's steep drop, as investors welcomed increased activity on the corporate deal-making front.
"The most intriguing driver of the marketplace is that companies have gone off the offensive and are putting cash back to work; you have to go back to the 1980s for this kind of deal activity," said Art Hogan, chief market strategist at Wunderlich Securities.
Individual stocks news may have been the focus on Monday, but the backdrop of Ukraine still hung over markets. Russian shares fell 1 percent before managing to pare losses and close higher by 1.5 percent.
On Sunday, pro-Russian rebels in east Ukraine took several European military inspectors hostage and seized the headquarters of regional television station in the city of Donestsk.
The Obama administration imposed sanctions on seven Russian government officials and 17 companies linked to President Vladimir Putin on Monday.
"The word coming from Capitol Hill and also Europe is that sanctions on Russian officials will be harder, more direct and onerous on President Putin's inner circle; this will disrupt normal trading conditions," Evan Lucas, a market strategist at IG Markets, said in a note.
On the data front, an Italian consumer confidence survey for April managed to beat expectations. The index soared to its highest since January 2010 with a reading of 105.4, versus a figure of 101.9 in March.
In other news, German drugmaker Bayer reported first-quarter profit that beat market expectations on Monday; shares rallied by 3.3 percent.