M&A activity is set to continue analyst claims

However activity expected to plateau in 2007 according to KPMG

High levels of mergers and acquisitions (M&A) are expected to continue, according to KPMG's Global M&A Predictor.

KPMG has predicted further increases in M&A activity albeit at a slower rate, but anticipates that M&A activity could then plateau in 2007.

Cyrus Lam, associate director at KPMG Corporate Finance, said: "If you look at the UK market it has been very active in terms of mergers and acquisitions. The most active sectors have been enterprise software and IT services.

"Active buyers in the IT sector seem to have one thing in common. They have come through the bad times, made their businesses profitable and now have their shareholder's backing to go out and make acquisitions," added Lam.

Stephen Barrett, international chairman of KPMG’s Corporate Finance practice, added: "Despite early signs that the pace of global M&A activity is close to peaking, KPMG’s Global M&A Predictor suggests that there is still considerable scope for corporates to forge intelligent deals, before the cycle takes a pause for breath and plateaus for a period.

"Corporate confidence is high, balance sheets are strong and, given the astute management of the corporate sector, there is plenty of room for corporates to drive further growth in profits from revenue and cost synergies. In addition, macro-economic conditions are favourable. Now could be the right time for any corporate willing to take first mover advantage and do the intelligent deal," added Barrett.