The power sector saw merger and acquisition deals worth a combined USD 174.4 billion globally in 2011, a 16 per cent growth vis-a-vis the previous year, according to a report.

According to PricewaterhouseCoopers' annual review of M&A deals in the global power sector, the total deal value in the power sector was up 16 per cent from USD 150.5 billion in 2010 at USD 174.4 billion in 2011.

The number of deals went down to 583 in 2011 from 670 in the preceding year.

The report said deal values were boosted by the strong performance in the US and Asia-Pacific region.

Various reasons have been cited for consolidation in the sector. These included companies looking at gaining a larger presence in growth markets and strong international interest in infrastructure assets.

Deal activity in the Americas saw a surge in 2011, contributing USD 58 billion to total M&A activity.

Meanwhile, Asia-Pacific bidders were involved in USD 14.1 billion worth of deals last year. In addition, Asia-Pacific entities accounted for the largest number of deals during the year, with a total of 156 transactions.

"Asia-Pacific buyers and sellers were behind the largest number

of deals in 2011. Any softening of European valuations, for example,

will further heighten the interest of Asia-Pacific buyers, already

helped by exchange rates," the report noted.

In contrast, Europe recorded its lowest share of worldwide power

M&A deals in terms of value since PwC started analysing deal-making

in the sector in 1999, with the total deal value in Europe plummeting

43 per cent year-on-year to USD 39.8 billion in 2011 from USD 70.3

billion in the previous year.

"It's a different M&A world that is less euro-centric. European

companies are looking to South America and other growth markets.

Asia-Pacific buyers are busy in Europe. The US deal flow is compelling

and has further to go if current deals get the regulatory green light,"

PwC Global Power and utilities leader Manfred Wiegand said.

"There are plenty of reasons to expect deal flow to continue

unless the current crisis has a worldwide recessionary effect," he added.

Looking ahead, the report noted, "A mix of divestment, repositioning

and market growth imperatives continue to make for potentially buoyant

power deal conditions. But a pick-up remains stalled as concerns

about the euro zone crisis and economic growth persist."