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Russian M&A rose 57% to $63.6 bln in 2006

Russia's mergers and acquisitions climbed 57% in volume last year, spurred by the positive macroeconomic climate, said KPMG Ltd.

The volume of M&A deals grew to $63.6 billion from $40.5 billion in 2005 and accounted for 6.2% of the European M&A market, up from 4.4% of the European market the year before, said KPMG Ltd, an audit and consulting services provider. „The Russian M&A market still has great growth potential,” KPMG said in an e-mailed statement today.
The M&A market accounted for 6.5% of gross domestic product in 2006, up from 4.3% of GDP in 2005, the firm said. Russia, the world's second-biggest oil producer after Saudi Arabia, has benefited from an oil price boom that underpinned economic growth and helped push its foreign-currency reserves to $311.2 billion as of February 16.
The country's economy will probably expand 6.05% this year, down from 6.7% in 2006, as oil prices decline to $55 a barrel in 2007, according to the Economy Ministry. The average value of a merger or acquisition was $78 million in 2006, when the M&A market became more transparent, KPMG said. The rate of public disclosure of M&A deals reached 57% in 2006, up from 30% in 2005, the company said.
The biggest M&A deals last year were completed in the oil and gas, metals, consumer goods, telecoms and financial-services industries, the same as in 2005, according to KPMG. „We expect the Russian M&A market value to expand further in 2007,” KPMG said. (Bloomberg)