* FTSEurofirst 300 rises back up off 2-1/2 month lows
* M&A deals lift Faurecia and Sanofi
* Dialog slumps, dragging down ARM
By Sudip Kar-Gupta
LONDON, Dec 15 (Reuters) - European shares rose on Tuesday to bounce back from stinging losses in the previous session, as gains in major French companies propped up the region’s equity markets.
Shares in German chipmaker Dialog Semiconductor slumped 9.7 percent, however, dragging down peers such as ARM , after Dialog slashed its revenue guidance.
The pan-European FTSEurofirst 300 index, which fell to its lowest level in 2 1/2 months on Monday due to a slump in oil prices, rose 1.6 percent while the euro zone’s blue-chip Euro STOXX 50 index advanced 2 percent.
The French CAC-40 equity index climbed 2 percent. The Paris market was helped by French pharmaceuticals group Sanofi, which climbed 4.1 percent after it said it would swap some assets with Boehringer Ingelheim.
There was also an 8.5 percent surge in car parts company Faurecia after it agreed to sell a division to Plastic Omnium. The rise helped to lift the European autos sector , which was also boosted by a rise in European car sales.
Rupert Baker, European equity sales executive at Mirabaud Securities, said corporate takeover activity would continue to support European stock markets, in spite of negative headwinds from the lower oil price.
“The mergers and acquisitions space will remain busy while rates in Europe remain low,” said Baker.
Although the Federal Reserve is expected to raise U.S. interest rates on Wednesday for the first time in nearly a decade, euro zone rates are expected to stay at record lows.
Low euro zone borrowing costs are one reason why European stocks are expected to rise in 2016, according to a Reuters poll published this week.
The FTSEurofirst 300 index is up by around 2 percent since the start of 2015 but 16 percent below its peak for the year reached in April after concerns about a slowdown in China knocked back equity markets and commodity prices.
Today’s European research round-up (Editing by Catherine Evans)