European shares fall as Air Liquide loses steam

* FTSEurofirst 300 and Euro STOXX 50 fall back

* Air Liquide (EUREX: 502455.EX - news) down after announcing Airgas (NYSE: ARG - news) deal

* Global security still in spotlight after Paris attacks

By Sudip Kar-Gupta

LONDON, Nov 18 (Reuters) - European shares fell on Wednesday, retreating from solid gains made in the previous session, with industrial gas company Air Liquide slipping after announcing an expensive-looking acquisition.

There appeared to be limited market reaction to news that French authorities had killed two suspects after last week's attacks in Paris, which killed more than 120 people. Some European travel and leisure stocks lost ground but they were in line with the overall European market.

The pan-European FTSEurofirst 300 index, which rose 2.6 percent in the previous session, fell 0.6 percent while the euro zone's blue-chip Euro STOXX 50 index declined by 0.8 percent.

Air Liquide dropped 4.9 percent after the company announced a $13.4 billion deal to buy U.S (Other OTC: UBGXF - news) . peer Airgas.

In a research note, UBS (NYSEArca: FBGX - news) kept a "sell" rating on Air Liquide's shares and described the Airgas deal as "pricey", with Air Liquide's offer price representing a premium of 50.6 percent to Airgas's one-month average share price.

"The European stock markets are still looking a bit sluggish," said Berkeley Futures' associate director Richard Griffiths.

The European travel and leisure sector was down 0.6 percent.

An international soccer match was called off in Germany on Tuesday after a security alert while two Air France (Paris: FR0000031122 - news) flights from the United States were diverted. Air France KLM shares were down 1.1 percent on Wednesday.

Nearly all the companies on the pan-European STOXX 600 index have reported their third-quarter results, with 51 percent beating or meeting market expectations, while 49 percent missed market forecasts.

Expectations for more monetary stimulus from the European Central Bank next month has led some investors to expect further gains for European stocks and the FTSEurofirst is still up nearly 10 percent since the start of 2015.

McLaren Securities' managing director Terry Torrison said his clients had mixed views on European shares in the near term.

"It (Other OTC: ITGL - news) 's a mixed bag. Some are willing to buy into the market, but others think any ECB-led rally will be short-lived as the underlying European economy still has signs of weakness," he said.

Today's European research round-up (Editing by Susan Fenton)