KEY POINTS:
Worldwide merger and acquisition activity hit record levels last year, surpassing the previous record set during the heady days of the dotcom boom.
US$3.8 trillion worth of deals were done in 2006, an increase of 37.9 per cent on 2005 and higher than the US$3.4 trillion recorded in 2000.
According to United States-based research company Thomson Financial, activity was driven by private equity firms who had buyside involvement in 19.9 per cent of deals.
Globally, Thomson Financial estimate investment bankers have netted US$32.8 billion advising clients on mergers and acquisitions - a 26.7 per cent increase on 2005.
For the second year running Goldman Sachs was the leading financial adviser with involvement in nearly US$1.1 trillion worth of deals worldwide, receiving an estimated US$2.3 billion for its efforts.
Here's a look at 2006's top five deals:
1. Phone companies make connection
* Acquirer: AT&T
* Target: BellSouth Corp
* Deal value: US$89.4 billion
* Date announced: March 5
US telecommunications company AT&T grabs top spot on the 2006 mega-mergers table with a US$89.432 billion takeover of BellSouth.
The deal announced in March makes AT&T the largest phone company in the United States.
AT&T also took control of Cingular Wireless, considered to be the biggest mobile phone operator in the United States with close to 60 million customers.
Prior to the deal AT&T held a 60 per cent stake in Cingular Wireless, which it jointly owned with BellSouth.
BellSouth had operations in New Zealand between 1993 and 1998 before selling them to Vodafone.
2. What's the gas?
* Acquirer: E.ON
* Target: Endesa
* Deal value: US$71.4 billion
* Date announced: February 21
This deal had the European Union accusing the Spanish Government of protectionism, as it appeared to favour an earlier, lower bid from Spanish utility Gas Natural.
The Spanish Government approved the E.ON deal but imposed harsh conditions including the sale of generating assets. It later backed down and removed the requirement for asset sales.
E.ON, the world's largest private power and gas company, has more than 30 million customers in Europe and the United States.
3. French close ranks
* Acquirer: Suez SA
* Target: Gaz de France
* Deal Value: US$40.9 billion
* Date announced: February 25
In the second big energy deal in February, French utilities company Suez announced a merger with Gaz de France.
Critics of the deal accused the French Government of attempting to keep Suez in French hands by blocking potential takeovers.
Prime Minister Dominique de Villepin championed the deal as a shining example of 'economic patriotism".
The French Government had an 80 per cent stake in Gaz de France and will retain a 34 per cent stake following a merger.
But as 2006 rolls over into 2007 the merger is far from a done deal.
Rival bids for Suez are being considered by two of France's wealthiest men.
While Franois Pinault, owner of Gucci and Christie's auction house, mulls a hostile takeover of Suez, Bernard Arnault, head of luxury goods company LVMH, has teamed up with Belgian financier Albert Frère to prepare a joint counterbid.
Pinault and Arnault have previously faced off in a protracted battle for Gucci in 2001.
4. Steeling itself for battle
* Acquirer: Mittal Steel Co
* Target: Arcelor
* Deal Value: US$39.5 billion
* Date announced: January 27
* Completed: August 8
Steel maker Arcelor was added to the Mittal Steel empire after a bitter takeover battle. Lakshmi Mittal, listed in the Sunday Times Rich List 2006 as Britain's richest man, paid over US$39.5 billion for control of Arcelor.
The deal brings together the world's number one and number two steel companies to form Arcelor-Mittal, which will control of 10 per cent of the global steel market.
Mittal is no stranger to paying top dollar for mergers - he shelled out US$65 million for the 2004 wedding of daughter Vanisha, reported to be the most expensive wedding in world history.
5. Italians bank on unity
* Acquirer: Banca Intesa
* Target: SanPaolo IMI
* Deal Value: US$37.6 billion
* Date announced: August 26
* Consolidation in the Italian banking sector created Italy's biggest bank.
The US$37.624 billion merger between SanPaolo and Banca Intesa will also make it the tenth largest bank in Europe.
The merger was supported by the newly appointed Bank of Italy governor Mario Draghi, who has previously spoken out in favour of consolidation in the fragmented Italian banking sector.
Source: Thomson Financial
