The biggest deal of year was Cadbury/ Kraft - launched in 2009, it was agreed in January 2010 and set the scene for a busy year in the world of M&A. There has been a recovery in larger deals, with a 32.5% increase in deals over £100m, reflecting improving credit conditions and the increased willingness of CEOs to look at transformative deals, for example Thomas Cook's merger of its retail travel agencies with the Co-op in October, and the £400 million Northern Foods/ Greencore merger in November, and Wood Group's $955 million acquisition of oilfield services business PSN in December - all of which Ernst & Young advised on.

There was lots of competition for growth in the right sector and geography, with strong management teams - For example, Ernst & Young advised Hg Capital in their Euro 110 million acquisition of Stepstone Solutions in March. Hg won in a competitive auction where more than 15 offers from private equity and trade for one of Europe's leading software businesses.

2010 was marked by significant return in private equity activity - including billion-pound deals and take-privates. For example, just this month, Ernst & Young advised Montagu Private Equity on their co-investment along with KKRl into Visma, a highly attractive and competitive situation for the leading Nordics software business, valuing the company at Euro 1.4 billion. Earlier in the year, in February, Ernst & Young also advised Inflexion and management on the acquisition of listed software business FDM Group plc.

Commenting on the year's M&A activity, Ernst & Young Lead Advisory partner Simon Pearson comments: "Our read of the market shows that corporates and private equity houses got back in the M&A game in 2010. The market has continued to be polarised - strong demand for top quality assets set against more opportunistic situations where creativity rather than competition is the key."

Outlook for 2011
Simon says: "We are aware of the Capital Agendas of our corporate clients, with many looking crossborders to invest strong cash reserves in growth objectives driving more deals such as the two targeted deals we assisted Vodafone with in the US this autumn, the acquisitions of TnT Expense Management and Quickcomm.

"The global nature of deals advised in 2010 by EY's UK team was clear both for clients investing capital and in optimising capital allocations such as investments in Ghana and South Africa by American Tower Corporation and Tyco International's sale of its fire and security operations in Denmark, Sweden, Finland, Greece, Hungary and Poland, and the disposal of Amcor's Spanish packaging operations to Constantia.

"Our discussions with clients on their Capital Agendas' combined with the return of private equity indicates that 2011 looks set to have a stronger M&A market"