European shares rose on Monday, boosted by a surge in ARM to a record high after Japan's SoftBank agreed to buy the chip designer at a premium of more than 40 per cent to Friday's closing price.

ARM was up 43 per cent to 1,700p after SoftBank agreed to buy the British company in a 24.3 billion pound ($32.2 billion) deal.

The deal will see SoftBank pay 1,700p for every ARM share, and the Japanese firm said it would double ARM's UK staff and keep its headquarters in Cambridge.

ARM added 28 points to the FTSE 100, which was up 0.6 per cent, and contributed almost three-quarters of the index's rise.

Sterling's fall to its lowest in more than three years against the yen made ARM more attractive to SoftBank, and shares in ARM, which derives most of its earnings in dollars, have risen nearly 17 per cent since Britain voted last month to leave the EU.

“An increase in inbound M&A was one of the obvious consequences of Brexit and weakened sterling but few expected it to manifest itself so quickly or at so large a scale,” Dan Ridsdale, analyst at Edison Investment Research, said in a note.

Ridsdale added that, despite good growth prospects for ARM, the multiple looked expensive.

Sector peers Dialog Semiconductor, AMS and Infineon rose 3.3 per cent, 3.4 per cent and 2.1 per cent, respectively.

The STOXX 600 Technology sector was the biggest sectoral riser in Europe, up 3.9 per cent.

In all, the STOXX Europe 600 was up 0.7 per cent, touching its highest level since June 24, the day after Britain voted to leave the EU.

Among other risers, Dutch shipleasing firm SBM Offshore rose 13.2 per cent after striking a leniency deal in Brazil.

Shares in German forklift truck maker Kion were up 5 per cent after its results, which analysts said were above expectations.

In negative territory, SGS fell 4.6 per cent, the top STOXX 600 faller, after it missed first-half earnings expectations.

Tour operators Thomas Cook and Tui fell 2.9 and 1.7 per cent, respectively, as analysts saw an attempted coup in Turkey potentially reducing demand for travel there.

However, airlines Lufthansa and British Airways-owner IAG were both up, despite cancelling flights to Turkey over the weekend.

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