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Europe shares close higher as Alstom and Siemens announce rail merger

European markets closed higher on Wednesday afternoon, amid some major corporate news and highly anticipated details on tax reform in the U.S.

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The pan-European Stoxx 600 closed 0.4 percent higher provisionally with most sectors finishing in positive territory. Alstom shares rose to the top of the European benchmark following confirmation that the French firm and Germany's Siemens will merge their rail businesses. The former finished up by more than 4 percent.

Meanwhile, Finnish power utility Fortum is set to launch a takeover bid for Uniper totaling 8.05 billion euros ($9.5 billion), Reuters reported. The former finished higher by 0.91 percent.

The retailer Ica Gruppen was at the bottom of the benchmark, down by 4.5 percent, after a rating downgrade from SEB bank.

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US tax reform

In the U.S.m the GOP framework on tax reform released Wednesday would reduce the corporate tax rate to 20 percent, as many expected. It also proposes to create just three individual tax rates and double the standard deduction. U.S. stocks traded mixed Wednesday as investors eyed higher interest rates.

Market sentiment was dominated by monetary policy, given that geopolitical tensions over North Korea seemed to have scaled back slightly. Banking stocks were outperforming there peers on the latest comments from Janet Yellen, the chair of the U.S. Federal Reserve.

She said Tuesday that it would be "imprudent" to keep monetary policy on hold waiting for inflation to reach 2 percent and that moving "too gradually" could be risky. The U.S. dollar and bond yields also jumped Wednesday on such remarks. Banks traditionally perform better in a environment with higher yields.

Data out Wednesday morning showed French consumer confidence falling slightly in September from the previous month.