The pan-European STOXX 600 <.STOXX> index ended flat after setting an intra-day high of 375.42 points, its highest level since early December 2015. Germany's DAX <.GDAXI> was up 0.3 percent after hitting levels not seen since April 2015.

Lloyds (>> Lloyds Banking Group PLC), the second largest British listed bank to post earnings this week, was a top gainer, up 3.3 percent after impressing investors with profits rising to a ten-year high.

Telefonica Deutschland (>> Telefonica Deutschland Holding AG) rose 2.2 percent after it reported better-than-expected core profit for the fourth quarter and raised its target for synergies from its acquisition of E-Plus, while French insurance company Scor (>> SCOR SE) rose 3.2 percent after it raised its dividend and said it planned share buybacks due to a 5.4-percent increase in premiums.

Unilever (>> Unilever plc) rose 5.7 percent, making its shares the biggest gainers on the FTSE 100 index <.FTSE>, after saying it was reviewing its options to drive shareholder value, days after rejecting a $143 billion-bid from Kraft-Heinz.

A source close to the group said the review should be completed by April and could lead to asset sales and cost cuts.

ThyssenKrupp (>> ThyssenKrupp AG) was also a top gainer, up 4.6 percent after the German industrials and steel company said it had sold its Brazilian steel mill to Ternium (>> Ternium SA (ADR)), ending five years of unsuccessful efforts by the German company to exit Latin America's largest economy.

Fresenius Medical (>> Fresenius SE & Co KGaA) added to the strong German stock performance, up 1.6 percent after the healthcare group said 2016 sales rose 5 percent, adding that it has targeted double-digit annual gains by 2020.

The disposal price, 1.26 billion euros ($1.33 billion), was above UBS analysts' estimates. "For us, it is an important step forward to clean up ThyssenKrupp's comprehensive business portfolio and reduces earnings volatility going forward," they wrote in a note.

Ericsson (>> Telefonaktiebolaget LM Ericsson) was up 3.3 percent, extending Tuesday's gains on speculation that U.S. telecoms giant Cisco (>> Cisco Systems, Inc.) could buy the Swedish tech company, and on a positive note from Haitong Research, which started covering the stock on a "buy" rating, saying catalysts over the next two years could cause Ericsson's share price to double.

Italy's blue-chip index <.FTMIB> underperformed its European peers, dipping 0.8 percent as asset manager Mediolanum (>> Banca Mediolanum SpA) fell 3.2 percent after a target cut from Kepler Cheuvreux on concern over a possible fall in 2018 performance fees.

The shares, which plunged on Tuesday after the CEO flagged the risk, came off initial lows after the company said it would charge higher recurring fees to help offset the expected drop in performance income.

Sector peers Azimut (>> Azimut Holding SpA) and Banco BPM (>> Banco BPM SpA) were among top European fallers, down 3 and 4.2 percent respectively.

Weir Group (>> Weir Group PLC) was the biggest STOXX faller, dropping 8.9 percent. The maker of pipes and valves for energy and mining industries reported a 22-percent fall in full-year pretax profit, hurt by a weak North American oil and gas market.

(Additional reporting by Danilo Masoni in MILAN; Editing by Louise Ireland)

By Helen Reid