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Merger and acquisition activity in New Zealand surged last year as the increased availability of cheap capital and strong corporate earnings fuelled a worldwide takeover frenzy.
According to a report by United States-based research house Thomson Financial, the value of announced deals in New Zealand rose 10.9 per cent in 2006 to US$14.2 billion ($20.4 billion).
The deals were, on average, smaller than the previous year with the number of deals rising 27 per cent to 456.
The most active sector of the economy for mergers and acquisitions was industrials with 21.8 per cent market share. It accounted for US$3.1 billion of the total volume.
The New Zealand deals came as global merger activity reached a record US$3.8 trillion ($5.5 trillion), a 37.9 per cent increase over the previous year's value.
While private equity firms helped drive the increase overseas, accounting for about one-fifth of the deals announced globally, they were less in evidence in New Zealand.
The biggest deal announced last year was Graeme Hart's Rank Group's December offer of US$2.1 billion for Swiss-based packaging group SIG Holding.
The largest deal completed during the year also involved Rank Group which paid US$1.006 billion for the 42.4 per cent stake in Burns Philp it did not own.
Close behind was the US$992 million US timber investor Hancock Natural Resources purchase of Carter Holt Harvey's forest estate. Carter Holt Harvey was also controlled by Mr Hart.
Australian companies and funds led the buyers in New Zealand's merger and acquisition activity as they accounted for US$3.8 billion of the value. Domestic investors were second most active with deals valued at US$3.1 billion.
Credit Suisse topped the financial adviser ranking of announced deals with 11 worth US$5.6 billion followed by UBS and Goldman Sachs with US$3.3 billion and $3 billion.
Credit Suisse also topped the completed deals ranking with seven worth US$2.8 billion.
- NZPA
