The rush of foreign firms to buy UK assets has resembled more of an invasion in 2005 than a series of individual bid battles.
Telecoms giant O2, drinks group Allied Domecq, shipping icon P&O and Manchester United football club were just four of the household names to succumb to bids from abroad over the past 12 months.
Activity was heaviest on Halloween as traders return-ing to their desks after the weekend watched in amaze-ment as bid approaches worth more than £22 billion were revealed in a matter of minutes.
They included the £17.7 billion acquisition of O2 by Spanish rival Telefonica - the biggest takeover of a UK company since France Telecom shelled out £31 billion for Orange in 2000.
According to analysts at Dealogic, deals worth $137.4 billion (£78.5 billion) were agreed between the start of January and December 20 - up 57 per cent on the previous 12 months and the highest level since 2000.
In a break with recent tradition, it was European firms rather than those based in the United States that spent the most money on UK assets.
French companies paid $28.1 billion (£16 billion) on deals during the year, including the takeovers of Allied Domecq by Pernod Ricard and plasterboard maker BPB by Saint-Gobain.
This outlay was more than French firms have spent in aggregate over the previous four years on UK rivals.
Barclays Stockbrokers analyst Hilary Cook said the surge in merger and acquisition activity was no surprise as firms had worked hard to tidy up their balance sheets and money could be borrowed more cheaply than at any time in the past ten to 15 years.
European firms facing slow economic growth, weak domestic demand, poor consumer sentiment and high unemployment saw UK firms as the answer to their problems. This was in contrast to American firms operating in a high-growth economy and which had plenty of opportunities at home, Ms Cook said.
Mike Lenhoff, chief strategist at Brewin Dolphin, said a key attraction of UK companies was their international reach with those in the FTSE 100 Index generating twothirds of their sales overseas.
P&O, for example, operates 29 terminal container terminals and logistics operations in more than 100 ports - a strength that persuaded Dubai Ports World last month to offer £3.3 billion to take it over.
Mr Lenhoff said: "Everybody is just much more confident in the global expansion that's taking place and think it isn't a flash in the pan."
Analysts at many of the biggest investment banks in the City including Morgan Stanley believe that bid activity will remain high, triggering further gains for the FTSE 100 Index in 2006.
ABN Amro analyst Ian Richards said: "Confidence has returned and the market is in the mood to back growth, with shareholders in acquiring companies now responding favourably to sensibly structured deals."
International firms will continue to eye up firms in the top flight because the UK treats overseas investors fairly while private equity groups should swoop again on firms in the FTSE 250 Index.
Potential takeover candidates for venture capitalists in 2006 include Sainsbury's, Associated British Foods, EMI, Kingfisher and Rentokil Initial, Mr Richards said.
Ms Cook also had Kingfisher on a list of possible bid targets that featured Centrica, Prudential, ITV and Alliance & Leicester.
Past takeover battles and deals often centred on companies that were in poor shape and where investors needed little persuading of the merits to sell their shares at a premium.
Now foreign predators are having to pay full prices for British firms that have a strong record of growth.
Australian bank Macquarie, which has holdings in the M6 Toll and Birmingham Airport, has made no secret of
its interest in firms with a stable cash flow - most recently tabling a £1.5 billion offer for the London Stock Exchange.
Macquarie has been as active this year as Icelandic retail group Baugur, which has continued to expand its presence on the UK high street by buying Whittard of Chelsea and Mappin & Webb.
But it has not all been oneway traffic and London-listed firms have also spent heavily on takeovers this year. Headline deals include the $3.97 billion (£2.09 billion) spent by aerospace giant BAE Systems on US rival United Defense Industries.
Research by corporate finance house Close Brothers this month found that UK manufacturers were responsible for more takeovers in 2005 than firms in any other country.
According to its report, UK manufacturers tied up 91 deals worth £8.3 billion over the past 12 months.
Andrew Cunningham, of Close Brothers said: "UK manufacturing companies remain sought-after assets due to the credibility of their strong, internationally recognised brands and their high levels of technical ability and innovation."
