* FTSEurofirst 300 up 1.1 pct, hits highest since July 2007
* M&A speculation boosts Burberry, Mediaset
* Auto sector rises on strong sales data
By Francesco Canepa and Blaise Robinson
LONDON/PARIS, April 9 (Reuters) - European shares rose to their highest in nearly eight years on Thursday on the prospect of more corporate deals, as well as figures showing a strong recovery in Europe's auto sector and robust German data.
The pan-European FTSEurofirst 300 index provisionally closed up 1.1 percent to 1,630.08 points, hitting its highest level since July 2007 and taking its gains so far this year to 19 percent.
Lafarge and Holcim rose 5.7 percent and 3.6 percent respectively after they chose the chief executive of their combined company, allowing the cement groups to clinch their $40 billion merger if shareholders back it next month.
British luxury goods maker Burberry rose 2.8 percent after positive numbers from Mulberry and talk of consolidation in the sector.
Burberry was flagged by Goldman Sachs among shares on its "conviction buy" lists for which its sees a bid probability of 30 percent or more.
Italian media group Mediaset rose 2.2 percent after Mediobanca tipped it as a bid target for France's Vivendi .
German generic drugmaker Stada was up 2.9 percent as U.S. rival Mylan's proposed takeover of Ireland-based Perrigo fueled a re-rating in the sector.
The European equity rally has largely been fueled by the European Central Bank's bond buying programme, known as quantitative easing (QE).
"It's M&A and QE driving the market at the moment," Tradition broker, Mike Reuter, said.
German data also lifted the mood, with seasonally adjusted exports rising 1.5 percent on the month after dipping 2.1 percent in January.
Auto stocks advanced also after industry figures showed the sector's recovery broadened to France and Spain, Italy and Portugal in March.
Car maker Renault and tyre firm Michelin both rose more than 2 percent. The STOXX auto sector index - whose 31 percent rise this year is the best performance among European sectors - was up 2 percent.
Greece's Athex index closed 1.1 percent higher after the country confirmed it will pay a 450 million euro ($485 million) loan installment to the International Monetary Fund and the ECB raised the cap on emergency liquidity assistance that Greek banks can draw.
With many equity indexes up 20 percent or more this year, some traders were worrying a pullback may be imminent.
"A lot of good news have already been priced in and there are quite a few potential negative catalysts on the horizon, including the Fed's first rate hike," IG France chief market analyst, Alexandre Baradez, said. "We could soon get a 5 to 10 percent correction."
The Federal Reserve's last policy meeting minutes, published on Wednesday, suggested a June rate hike is still possible.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up (Editing by Tom Heneghan)