* FTSEurofirst 300 up 1.1 pct, Euro STOXX 50 up 1 pct
* AstraZeneca jumps 6.8 pct on M&A talk
* Philips drops 6.5 pct after disappointing earnings
By Francesco Canepa and Blaise Robinson
LONDON\PARIS, April 22 European shares rose on Tuesday, extending last week's gains, as mergers and acquisitions activity in the pharmaceuticals sector eclipsed disappointing results from Dutch conglomerate Philips.
The STOXX Europe 600 health care index rose 2.7 percent as AstraZeneca rallied on speculation about a bid approach from U.S. major Pfizer, while a deal to swap assets boosted GlaxoSmithKline and Novartis .
Shares in AstraZeneca surged 6.8 percent - the top gainers among European blue chips - after Britain's Sunday Times reported that Pfizer has approached its British rival to propose a 60 billion pound ($101 billion) takeover.
GlaxoSmithKline surged 5.3 percent after it agreed to sell its oncology products to Novartis for $14.5 billion, while buying the Swiss firm's vaccines, excluding flu. Novartis' shares were up 1.9 percent.
The global pharmaceuticals sector has seen a flurry of deal-making recently and analysts expected M&A activity to be a key driver for the shares in the coming months.
"Any stock in the industry is a target apart from the ones that are too big (such as Pfizer and Novartis)," said Lars Hevreng, an analyst at SEB Equities.
"It's simply a combination of very low financing costs and a strong-balance-sheet industry on one hand, and on the other hand consolidating companies that are still fairly similar to each other."
The sector index is up 5.8 percent so far this year, outpacing the broad market, with the FTSEurofirst 300 up 2.1 percent in 2014.
At 1027 GMT, the FTSEurofirst 300 index of top European shares was up 1.1 percent at 1,343.20 points. The index has gained about 3 percent since mid-April, but is still down about 1 percent from a near six-year high hit early this month.
The euro zone's blue-chip Euro STOXX 50 index added 1 percent to 3,187.55 points.
Shares in Philips tumbled 6.5 percent after the healthcare, lighting and consumer appliances group reported a bigger-than-expected fall in quarterly operating profit.
It warned 2014 would be challenging, blaming unfavourable exchange rates and slowing demand for medical equipment in China and Russia.
"Behind the M&A noise, the earnings picture in Europe has not been very rosy so far," said Alexandre Baradez, chief market analyst at IG France.
"The market needs a real positive catalyst, such as a good string of corporate results or pro-active measures from the European Central Bank, otherwise this month's pull-back will soon resume."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Editing by Catherine Evans)