LONDON (TheDeal) -- European stocks were back in positive territory on Wednesday, recovering from a three-day decline amid stronger-than-expected German consumer confidence and as deal momentum boosted individual stocks, including Imperial Tobacco (ITYBY).

In London, the FTSE 100 was up 0.55% at 6,987.19, while in Paris, the CAC 40 was 0.36% higher at 5.101.99. Frankfurt's benchmark DAX index was the laggard, but still 0.08% up at 11,634,84 by late morning local time.

Market sentiment got a boost from Europe's largest economy, where GfK said that German consumer confidence rose to a reading of 10.2 for June from 10.10 in May -- its eighth consecutive increase and its highest level since October 2001.

"The newly found love for shopping should continue boosting private consumption in the months ahead," predicted Frankfurt-based economist Carsten Brzeski of ING-DiBa in a note.

Later today, European investors will be watching meetings in Brussels between Greek officials and international creditors for new developments on the highly volatile Greek debt situation. A Group of Seven finance chiefs' gathering is also taking place in Dresden, Germany.

Leading London gainers, Imperial Tobacco was up 2.35%, a day after the U.S. Federal Trade Commission granted conditional approval on the sale of four cigarette brands to the company, in return for giving the thumbs up to Reynolds American's (RAI) $27 billion merger with Lorillard (LO).

To allay competition concerns, the merging companies will sell Reynolds' Winston, Kool and Salem as well as Lorillard's Maverick brands to Imperial Tobacco, roughly in line with the companies' July 2014 agreement.

Also in London, International Consolidated Airlines (ICAGY) advanced 1.29% after getting the official green light from the Irish government for its €1.4 billion ($1.5 billion) takeover bid for Ireland's Aer Lingus Holdings (AIRXY). A takeover would give the owner of British Airways and Iberia vital new transatlantic flight capacity from Dublin.

Irish Transport Minister Paschal Donohoe announced the decision late Tuesday, which is conditional on approval from Aer Lingus' leading shareholder, Ryanair Holdings (RYAAY), and on the bid vehicle securing 90% of Aer Lingus.

Aer Lingus shares were up 1.67% in Dublin on Wednesday.

In Milan, Assicurazioni Generali (ARZGY) added 1.41%. Italy's largest insurer, and No. 3 in Europe, announced plans to raise dividends and increase cash flow to more than €7 billion by 2018.

Generali also unveiled a strategic plan to become Europe's leader in retail insurance by focusing on brand positioning of "simple and smart" products and services and enhancing connectivity and data analytics. It will also introduce a new position of chief data officer, which will report directly to the group CEO.

In Amsterdam, Royal Ahold (AHONY) was up 0.84% after reporting a rise in first-quarter net income, offsetting a drop in operating income as its U.S. market share declines. Ahold is in early-stage merger talks with Belgian peer Delhaize (DEG), which may give an update on the state of play at Thursday's regularly scheduled shareholders meeting in Brussels.

Asian markets were mixed. The Hang Seng retreated 0.60% to 28,081.21 in Hong Kong, while the Nikkei moved up 0.17% in Tokyo to 20,472.58.

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