In line with continental Europe and the UK which last year achieved their strongest Mergers & Acquisitions performance in recent history, transaction activity in Central & Eastern Europe was also extremely buoyant, PricewaterhouseCoopers has reported in its latest M&A report on Tuesday.

In total 2,527 publicly-disclosed private transactions were completed in the CEE countries last year. Overall, deal volume rose by 37% last year while the total value of these transactions rose by 79% and reached a record-breaking USD 163bn compared with USD 91bn in 2005, PwC added.

PricewaterhouseCoopers tracked publicly disclosed, private-sector transactions in eleven countries of the region: Bulgaria; Croatia; Czech Republic; Hungary; Poland; Romania; Russia; Slovakia; Slovenia; Ukraine and including Serbia in its survey for the first time.

“Much of this growth was due to an outstanding performance by Russia which recorded 1,210 transactions totalling USD 111bn during 2006. As a whole, however, M&A activity in CEE remained robust with new stars such as Ukraine and Serbia beginning to attract considerable investment attention" - highlighted Margaret Dezse, Corporate Finance partner of PwC.

“Robust growth in the region means that M&A market value last year doubled that seen in 2005 and more than tripled the aggregate value of M&A recorded in 2004," she added.

There are few surprises among the ranking of industry sectors by M&A activity in 2006 with a similar picture to previous years emerging. Manufacturing remains the titleholder for the most active sector with 499 transactions (384 in 2005) representing 20% and 21% of the deal total, respectively. It is followed by financial services with 16% (13% in 2005); food & beverages with 10% (9% in 2005) and energy & utilities also at 9% (10% in 2005).

However with regard to year-on-year deal volume growth, construction, transport, financial services and retail & wholesale last year showed the greatest increases.

The pharmaceuticals & chemicals industry earned the title of ‘most valuable industry' in CEE with 344% increase in the average deal size from USD 45m to USD 200m in 2006.

The 11 countries (newly joined by Serbia) reported 490 privatisations in 2006. This compares to 322 in 2005. The power houses of the region were Serbia (210), Russia (158) and Poland (56), which accounted for 87% of all privatisations in CEE. The top five sell-offs totalled at USD 4bn representing 53% of the entire CEE privatisation market.

In contrast to the generally upbeat M&A trend, the total value of privatisations dropped dramatically last year, from USD 22.8bn in 2005 to USD 7bn in 2006. This could be a positive sign, indicating that much of the CEE region has matured beyond the State sell-off stage.