M&A, car sales help European shares to new 8-year high

* FTSEurofirst 300 up 0.8 pct, hits highest since July 2007

* M&A speculation boosts Burberry, Mediaset (LSE: 0NE1.L - news)

* Auto sector rises on strong sales data

By Francesco Canepa and Blaise Robinson

LONDON/PARIS, April 9 (Reuters) - European shares rose on Thursday after figures showing a strong recovery in Europe's auto sector, robust German data and mergers and acquisitions activity or speculation around a number of stocks.

Lafarge (Paris: FR0000120537 - news) and Holcim (LSE: 0QKY.L - news) rose 4.8 percent and 3.8 percent, respectively after they chose the chief executive of their combined company, opening the way for the two cement groups to clinch their $40 billion merger if shareholders back it next month.

British luxury goods maker Burberry 2.7 percent after positive numbers from Mulberry and talk of consolidation in the sector.

Burberry was flagged by Goldman Sachs (NYSE: GS-PB - news) among shares on its "conviction buy" lists for which its sees a bid probability of 30 percent or more.

Italian media group Mediaset rose 2.8 percent after Mediobanca (Milan: MB.MI - news) flagged it as a bid target for France's Vivendi (Swiss: VIV.SW - news) .

German generic drugmaker Stada was up 2.8 percent as U.S. rival Mylan (Berlin: 6MY.BE - news) 's proposed takeover of Ireland (Other OTC: IRLD - news) -based Perrigo fuelled a re-rating in the sector.

The pan-European FTSEurofirst 300 index rose 0.8 percent to 1,624.73 points by 1400 GMT, hitting its highest level since July 2007 and taking its gains so far this year to 18.7 percent.

The rally has largely been fuelled by the European Central Bank's bond buying programme, known as quantitative easing (QE).

"It's M&A and QE driving the market at the moment," Tradition broker, Mike Reuter, said.

Robust German data also lifted the mood, with seasonally adjusted exports rising 1.5 percent on the month after dipping 2.1 percent in January.

Auto stocks advanced also after industry figures showed the sector's recovery broadened to France and Spain, Italy and Portugal in March.

Car (HKSE: 0699.HK - news) maker Renault and tyre firm Michelin (Paris: FR0000121261 - news) both rose more than 2 percent. The STOXX auto sector index - whose 31 percent rise this year is the best performance among European sectors - was up 1.7 percent.

Greece's Athex index was up 0.9 percent after the country confirmed it will pay a 450 million euro ($485 million) loan installment to the International Monetary Fund and the ECB raised the cap on emergency liquidity assistance that Greek banks can draw.

With many equity indexes up 20 percent or more this year, some traders were worrying a pullback may be imminent.

"I'm quite cautious at this point," IG France chief market analyst, Alexandre Baradez, said.

"A lot of good news have already been priced in and there are quite a few potential negative catalysts on the horizon, including the Fed's first rate hike and the UK and Spanish elections. We could soon get a 5 to 10 percent correction."

The Federal Reserve's last policy meeting minutes, published on Wednesday, suggested a June rate hike is still possible.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Louise Ireland/Hugh Lawson)