Emerging-market deals hit record

Deal mania wasn’t confined to the U.S. last year.

Mergers and acquisitions in emerging markets reached a record value of $635 billion in 2006 through 10,995 deals, data company Dealogic said Thursday.

The dollar value was up 53% from the previous high set in 2005.

China was the busiest emerging market, accounting for 2,289 deals worth $104.3 billion, an increase of 69% on 2005.

Russia and South Korea followed with $98.5 billion and $42.3 billion worth of deals, respectively.

South Korea accounted for two of the biggest emerging-market deals announced last year. Shinhan Financial Group agreed to pay roughly $7.1 billion for a majority stake in credit card issuer LG Card, and transportation firm Kumho Asiana agreed to pay almost $7 billion for Daewoo Engineering & Construction Co.

The deal volumes in emerging markets helped global mergers and acquisitions reach a record $4.06 trillion for the year.

The worldwide merger boom has been driven by low interest rates, gains in stock markets and easy credit.

Also fueling the deal market have been private equity firms that take part in leveraged buyouts. The expanding ability of the debt markets to absorb the junk bonds required to finance many buyouts also has boosted merger activity.

Investors in junk bonds -- debt rated below investment grade -- snapped up new issues at a record pace in 2006.

Global junk-bond borrowing reached an all-time high of $260 billion, according to Dealogic.