July 16 (Bloomberg) -- European stocks rose for a third day, led by ABN Amro Holding NV after Royal Bank of Scotland Group Plc sweetened its 71.1 billion-euro ($98.1 billion) offer for the Dutch lender.

ABN Amro jumped the most in three months. BT Group Plc, the U.K.'s largest phone company, and drugmaker GlaxoSmithKline Plc rose after brokerages lifted their recommendations on the shares.

Europe's Dow Jones Stoxx 600 Index gained 0.2 percent to 399.85 as of 11:17 a.m. in London, with 11 of 18 industry groups advancing. Speculation of increased mergers and acquisitions sent the measure to a third straight weekly gain on July 13 and to within 7 points of a record set in March 2000.

``M&A remains a true support for stocks and it's set to continue,'' said Michele Giovannetti, a fund manager at Montpensier Finance in Paris, which oversees $1.4 billion in stocks. ``There's still a lot of money to be invested.''

Takeovers in Europe have totaled $1.46 trillion so far this year, compared with a record $1.6 trillion in all of 2006, according to data compiled by Bloomberg.

National benchmarks climbed in 11 of the 18 western European markets. The U.K.'s FTSE 100 fell 0.1 percent. France's CAC 40 added less than 0.1 percent. Germany's DAX advanced 0.1 percent.

The Stoxx 50 added 0.3 percent, while the Euro Stoxx 50, a measure for the euro region, climbed 0.2 percent.

More Cash

ABN Amro, the biggest Dutch bank, gained 3.8 percent to 37.21 euros, the steepest advance since April 16. Royal Bank of Scotland, the U.K.'s second-largest, increased the cash portion of its offer for ABN Amro, in a bid to beat out Barclays Plc in the world's biggest banking takeover.

Royal Bank of Scotland, which is bidding with Banco Santander SA of Spain and Fortis of Belgium, offered 38.40 euros a share and raised the cash portion to 93 percent from 79 percent, the banks said in a statement today. Barclays's all- stock offer of 34.49 euros a share is 11 percent lower.

Barclays rose 1.6 percent to 736 pence. Royal Bank of Scotland added 0.3 percent to 642 pence.

``There are a number of factors pulling us forward but probably M&A is in the lead,'' said Stephen Pope, head of equity research at Cantor Fitzgerald Europe in London.

BT increased 1.7 percent to 335.25 pence after Merrill Lynch & Co. raised its recommendation for the U.K.'s largest phone company to ``buy'' from ``sell.''

``BT will be able to weather the broadband storm in the U.K.,'' Merrill analysts wrote. ``BT has more financial flexibility than we estimated and BT's subscriber base is not the most vulnerable in the market.''

GlaxoSmithKline, Lonmin

GlaxoSmithKline gained 1.4 percent to 1307 pence. Shares of the world's second-largest drugmaker were raised to ``neutral'' from ``underweight'' at JPMorgan Chase & Co.

Lonmin Plc, the world's third-biggest platinum producer, sank 6.9 percent to 3982 pence. The company said it will delay the sale of as much as 90,000 ounces of platinum until its next financial year because of a breakdown at one of its plants.

Separately, Citigroup cut its recommendation on the stock to ``hold'' from ``buy,'' citing reductions in production and sales volumes and an increase in costs.

Oil-services companies paced declines in energy shares after UBS AG cut its recommendations on Saipem SpA and Technip SA, following their ``strong performance.'' Oil stocks fell the most among the 18 industry groups in the Stoxx 600.

Saipem, Europe's biggest oilfield-services company by market value, lost 3.1 percent to 27.15 euros. UBS AG cut its recommendation on the stock to ``neutral'' from ``buy.''

Technip, the region's second-largest, sank 2.1 percent to 61.74 euros. UBS downgraded the shares to ``reduce'' from ``neutral.''

Saipem has gained 37 percent so far this year, while Technip has advanced 19 percent.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

Last Updated: July 16, 2007 06:29 EDT