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Monday, July 19, 1999 Published at 00:31 GMT 01:31 UK

Business: The Economy

UK leads the merger frenzy

The Vodafone/Airtouch merger, boosting the M&A balance sheet

This year's wave of mergers and acquisitions (M&A) looks set to top the merger frenzy of 1998, and UK firms are dominating the field.

Head of M&A at KPMG, Stephen Barrett assesses the recent wave of mergers
According to the latest KPMG Corporate Finance survey, UK firms were the top buyers during the first six months of 1999.

Deals such as Vodafone's bid for Airtouch did a lot to boost the balance sheet, and telecommunications was indeed the most active sector for mergers on a global scale.

The second quarter of the year was the most active, with link-ups worth $285bn, and UK firms acting as buyers in 48% of deals.

In their survey report, the KPMG researchers said that "1999 looks set to beat easily" the year before, when merger deals totalled a record $544bn.

European buyers on top

Boosted by UK activity, European firms were behind two thirds of all merger deals worldwide, buying companies worth $189bn between April and June.

British firms accounted for $139bn of that total.

US firms were well behind, doing deals worth $38bn, while Spanish firms went on a $19bn shopping spree.

Stephen Barret, head of M&A at KPMG Corporate Finance said: "UK firms are clearly increasingly confident about their ability to handle market-transforming global acquisitions and are looking to make a real impact in overseas markets."

The United States appears to be a shopper's paradise, attracting 51%, or about $145bn, of all international investment.

Once again UK firms are in the forefront, buying companies worth $80bn during the second quarter alone.

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