European shares buoyed by health care M&A, BSkyB plummets

* FTSEurofirst 300 up 0.3 percent

* Grifols (Madrid: GRF-P.MC - news) and Shire (LSE: SHP.L - news) bounce after acquisitions

* BSkyB falls after BT nets Champions League games

* RSA drops after probe into Irish unit

By Alistair Smout and Julia Fioretti

LONDON, Nov 11 (Reuters) - Europe's top shares rose on Monday, led by health care stocks after well-received acquisitions in the sector, with gains capped by steep drops for broadcaster BSkyB and insurer RSA.

Spanish pharmaceutical firm Grifols gained 4.5 percent after acquiring a blood transfusion testing unit from Novartis (Xetra: NOTA.DE - news) , while Shire rose 0.9 percent after strengthening its portfolio in a $4.2 billion deal to acquire ViroPharma (NasdaqGS: VPHM - news) .

"Usually it's better to be the acquired than the acquirer, but the market seems to like these deals. Shire said the deal would help earnings in the first year though, which was somewhat comforting," Mike Ingram, analyst at BGC Partners (NYSE: BGCA - news) , said.

"A pick-up in M&A activity is in general good."

The FTSEurofirst 300 closed 0.3 percent higher to 1,298.52 points, building on five straight weeks of gains, while the euro zone's blue-chip Euro STOXX 50 firmed 0.6 percent to 3,052.83 points.

Technical analysts were bullish on the Euro STOXX 50, which rose well above its 20-day moving average at 3,036. Craig Erlam at Alpari targeted 3,106, the five-year high hit last week.

But BSkyB and RSA nursed double-digit percentage falls.

Britain's dominant pay-TV operator shed 10.9 percent to 833.5 pence in brisk trade as investors recoiled from the group's loss of Champions League soccer rights to BT, which rose 0.4 percent.

Analysts said the defeat also raised the likelihood that BSkyB would have to bid very aggressively to keep the English Premier League rights when they next comes up for auction.

"This may be an overreaction, but with BSkyB appearing to be losing their grip on content exclusivity and the price bar now being raised for the Barclays Premiership the only real winners here appear to be the football clubs," Mike McCudden, head of derivatives at Interactive Investor, said.

Trading volume in BSkyB stood at 460 percent of its 90-day daily average, against the FTSEurofirst 300 on 35 percent.

Britain's largest general insurer RSA was also down 10.5 percent, in volume 8 times its 90-day average, on news it is probing losses and premiums at its Irish unit stretching back at least two years after an internal audit triggered the group's second profit warning in a week.