"Mergers and acquisitions will certainly continue for a while because companies' coffers are filled, " said Rolf Biland, who oversees the equivalent of $4.1bn as chief investment officer at VZ Vermoegenszentrum in Zurich, Switzerland. So far in 2007, mergers in Europe have totaled $668bn, according to data compiled by Bloomberg. They reached a record $1.6 trillion in 2006. The Dow Jones Stoxx 600 Index added 1.6% to 389.26. The Stoxx 50 rose 2.2% and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, climbed 2.3%. National benchmarks gained in all but one of western Europe's 18 major markets. The UK's FTSE advanced 0.4%, France's CAC 40 rallied 2.6% and Germany's DAX increased 1.8%. Societe Generale surged 16%. Germany's Handelsblatt also reported the two banks are holding talks in early stages, without saying who provided the information. ABN Amro, the target of the largest takeover battle in the banking industry, jumped 7.9%. The Dutch bank agreed to meet with a group of bidders led by Royal Bank of Scotland Group, threatening Barclays' acquisition plans. Alliance Boots climbed 6.2%.

Guy Hands's Terra Firma Capital Partners increased its bid for Alliance Boots to about �10.9bn ($21.8bn) to trump an offer from Kohlberg Kravis Roberts & Co.

Deutsche Bank gained 7.3%. The shares rose the most in nine months today on speculation Germany's biggest bank may be acquired by Citigroup.

Banking shares were the best performers among 18 industries represented in the Stoxx 600, followed by technology stocks.

ASML Holding jumped 7.6%.

SAP advanced 4.2%. Nokia Oyj gained 5.3%. The world's largest maker of mobile phones reported a wider-than-estimated operating margin and said the company's market share increased to 36%. Net income fell 6.6% on sales of lowerpriced handsets to China and India.

Debenhams tumbled 14%, for the worst performance among the stocks in the Stoxx 600. Britain's second-largest department-store company said full-year profit will trail analysts' estimates after a sales decline worsened. Data due next week on March durable goods orders and existing home sales in the US may give investors an indication of growth in the world's largest economy. Among reports out of Europe, the UK's first-quarter economic growth and a measure of German consumer confidence are scheduled for release. Companies reporting first-quarter earnings next week include Novartis, Switzerland's biggest drugmaker, and GlaxoSmithKline, Europe's largest pharmaceutical maker. BP, the region's second-biggest oil company, and Siemens, Europe's engineering company, also intend to release results.