Takeover and merger activity involving Irish companies this year were worth more than £5 billion. Irish firms made acquisitions or mergers worth over £3.5 billion while foreign companies spent more than £1.5 billion buying Irish firms. The highest value deal in the Irish market in 1997 was the merger of the Avonmore and Waterford food companies to create a group with an annual turnover of more than £2.5 billion and annual operating profits of about £100 million.

The £870 million merger deal was seen as heralding a series of mergers which could revitalise the dairy sector. It was the highest value deal of the year involving an Irish company.

Allied Irish Bank's £840 million takeover of the Dauphin Deposit Corporation in the US was the second largest deal involving an Irish company. The third largest deal of 1997 was the takeover of the Quinnsworth/Crazy/ Prices/Stewarts retail chain by British retail giant Tesco in a £641 million sterling deal. That deal was followed by a management buyout of the Lifestyle Sports division of Quinnsworth in a £15 million deal.

There was brisk and high value activity in the financial, construction and food sectors throughout the year. Activity in the financial sector included the takeover of the publicly quoted Woodchester Investments by GE Capital for £591 million. This takeover was sparked by the financial difficulties at the French bank, Credit Lyonnais, which had a 53 per cent stake in the Irish company. Towards the end of the year Bank of Ireland beat Irish Life in its quest to take over the New Ireland life assurance company from French owner Union Assurance de Paris. Irish Life had earlier expanded into Hungary through a joint venture deal with partner Kredietbank of Belgium. They bought a 48 per cent stake in K & H Bank for £60 million.

Bank of Ireland paid £274 million for New Ireland to boost its share of the life assurance market. The move will make the bank the clear number two in that market. The sale meant that UAP left the Irish market - earlier in the year it sold its general insurance operation, Irish National, to Eagle Star for £30 million.

The sales were part of the consolidation in the life and general markets which continued throughout the year. Other consolidation moves included the Royal Sun Alliance takeover of AMEV for £13 million and Eureko's takeover of Touchline for £0.7 million. One of the most active companies on the takeover trial again this year was construction group CRH. It paid out over £160 million for a number of companies in the US, Holland and France. But the 1997 acquisition spree fell well short of the £418 million paid out by the group in 1996.

The bulk of the acquisitions this year were in the US. CRH's biggest acquisition in 1997 was CPM Development Corporation, a Washington-based building materials group, for which it paid £62.7 million. Its last acquisition of the year was the US aggregates company, New York Trap Rock Corporation, at a cost of £27.4 million.