Spending on takeovers and mergers in Britain is picking up smartly and has already outstripped last year's first half total by a third.

Although the number of deals is still lagging behind, completed acquisitions have totalled $122bn (£66bn) compared with $92bn, according to the bi-annual KPMG/Dealogic analysis. The outturn is likely to show an even stronger result with the value of deals climbing to $129bn, according to KPMG/ Dealogic. The analysis also expects the total number of acquisitions to outstrip the first six months of 2004.

"Although UK deal numbers have not matched the most bullish predictions, the value of activity is clearly on an upward track. There is a pick-up across the larger end of the market with 30 deals over $1bn closing so far this half," according to Stephen Barrett, international chairman of KPMG's corporate finance practice.

The more upbeat tone of the mergers and acquisitions data is beginning to be reflected in stock market flotations. On Friday satellite communications group Inmarsat saw its initial public offering heavily oversubscribed after pricing the issue at the very top of the indicated price range.

Property is proving to be the hot spot in corporate acquisition activity, becoming the largest by value though still lagging behind the media, information and software sector in terms of the number of deals. The question was now whether demand would survive the pick-up in equities as an alternative investment and whether the slowdown in consumer spending would affect demand. The pick-up in merger and acquisitions activity in Britain has been reflected globally with 10,640 deals this year valued at $671bn.

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