Consultants PricewaterhouseCoopers have produced their “Power Deals” report on merger and acquisition (M&A) activity in the global electricity and gas industry – and say that after a record-breaking year in 2005, the sector is set for further escalation in deal volumes and values in 2006.

The 2005 figures were mainly as a result in the rise of ‘super-regional’ utilities and consolidation in Europe, and PricewaterhouseCoopers believes that European activity will continue to increase in 2006, as utilities move to consolidate in the EU in advance of the full liberalisation of energy markets by mid-2007. However, the report reflects a global trend towards domestic consolidation as increased competition drives companies to turn to M&A activities to deliver growth both horizontally and vertically.