(Adds closing prices)
* FTSEurofirst and Euro STOXX 50 both steady
* Fed rate decision due at 1800 GMT
* M&A resurfaces with Altice and Phoenix
* Spanish banks lifted by broker upgrades
By Danilo Masoni
MILAN, Sept 17 (Reuters) - European shares closed little changed on Thursday with many investors refraining from taking up big positions as they awaited a U.S. Federal Reserve decision on whether to lift interest rates for the first time since 2006.
The pan-European FTSEurofirst 300 index ended down 0.20 percent and the euro zone’s blue-chip Euro STOXX 50 index edged up 0.12 percent.
Despite the caution ahead of the Fed’s decision, dealmaking activity resurfaced driven by large piles of corporate cash and expectations that acquisitions will not get cheaper.
“Liquidity makes possible the impossible,” Ifigest fund manager Roberto Lottici said. “Yet the global economy battles to grow and the best thing the Fed can do is keep rates steady, but clearly set the path for a hike in the coming months.”
U.S. rates futures indicated a 25 percent chance of a increase on Thursday. The Fed will announce the outcome of its policy meeting at 1800 GMT, followed by a news conference by Chair Janet Yellen.
French telecoms group Altice agreed to buy Cablevision for a mix of cash and shares in a deal worth $17.7 billion including debt. Shares in Altice were up 0.68 percent after gaining 13 percent at the open.
Phoenix Group rose 0.47 percent. It had initially gained almost 3 percent after confirming talks to buy Guardian Financial Services. The planned Altice and Phoenix deals came a day after brewer ABI approached rival SAB Miller .
Bankia and Banco de Sabadell were up 9.25 percent and 6.3 percent respectively, leading Spanish banks higher and outperforming the market thanks to broker upgrades.
Wall Street was marginally higher in thin late-morning trading. On Thursday Asian stocks edged up to a three-week high while the dollar drifted lower against other currencies as investors consolidated positions before the Fed’s decision.
The latest poll by Reuters, on Wednesday, showed the majority of economists now expect no hike, although it remains an extremely close call.
Harry Shann, investment manager at Logic Investments, remained upbeat on European stock markets in spite of the risks posed by any move by the Fed to raise rates on Thursday.
Shann pointed to economic stimulus measures from the European Central Bank as a factor helping to underpin European equities, along with the prospect that China itself could also undertake similar steps to prevent any slowdown in its economy.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today’s European research round-up (Additional reporting by Sudip Kar-Gupta in London; Editing by Mark Heinrich and Susan Thomas)