By Sruthi Shankar and Ambar Warrick

(Reuters) -European shares closed higher on Monday, with healthcare stocks lifted by M&A activity, while Credit Suisse slipped after its chairman quit after an internal probe into his personal conduct.

The pan-European STOXX 600 index rose 0.7% and healthcare stocks were up 1.4%, after losing more than 2% last week, as Britain’s GlaxoSmithKline jumped 4.1%.

This followed confirmation at the weekend that the British drugmaker had rejected a 50 billion pound offer from Unilever for its consumer healthcare business.

Unilever shares slid 7.0% to touch March 2020 lows after it signalled on Monday it would pursue the deal, which it said represented a “strong strategic fit”.

“The negative share price reaction probably reflects investor fears that Unilever is going to come back with a higher offer and potentially pay too much,” said Russ Mould, investment director at AJ Bell.

Meanwhile, Credit Suisse shares slipped 2.3% after Chairman Antonio Horta-Osorio quit following an internal probe, including into breaches of COVID-19 rules.

New chairman Axel Lehmann said the Swiss bank will stick to its strategic overhaul despite Horta-Osorio’s exit, which comes less than a year after he was hired to help it deal with the implosion of investment firm Archegos and the insolvency of British supply chain finance group Greensill Capital.

Europe’s wider banking index gained 0.2%.

“We see the resignation as a negative outcome for Credit Suisse,” JPMorgan analysts said. “While the company indicates it will continue to execute its strategy, we believe the ongoing turnover with management changes brings further uncertainty.”

After notching up record highs at the start of the year, trading in European stocks has hit a turbulent patch in recent days as investors priced in an aggressive tightening of U.S. monetary policy, along with a possible near-term economic slowdown caused by COVID-19.

Among individual stocks, Sabadell rose 4.5% after HSBC upgraded the stock to “buy” from “hold”, as the brokerage sees the Spanish bank’s return on equity improving at a faster pace than its peers.

EDF slipped 4.2%, extending losses after Friday’s 15% fall as HSBC downgraded the French utility’s stock, saying it will face higher costs and lower prices caused by government intervention and lower nuclear output.

Belgium’s Ageas fell 7.4% to the bottom of the STOXX 600 after the Belgian government bought a stake, a move analysts say could signal trouble for the insurer in China.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Alexander Smith)