Investors cashed in on the busiest year for takeover activity since the tech boom during 2006, helping the FTSE 100 Index to rise by ten per cent over the year.

Here are some of the highlights.


There was relief in the retail sector as shoppers splashing out on furniture and electrical goods ensured a decent Christmas for most firms. Tesco, Next and M&S reported strong performances, but high street chains Body Shop and Clinton Cards warned on profits due to poor UK sales and music and video store MVC and off-licence Unwins were forced to call in administrators.

The bosses of Mittal Steel and Arcelor clashed over an attempt by British-based tycoon Lakshmi Mittal to create the world's largest steel producer. Mr Mittal said his £12.7 billion takeover offer made "industrial sense" but Arcelor chief Guy Dolle said the firms lacked the same vision and values.

Up to 1,700 workers were braced for redundancy after Rentokil Initial axed its UK linen and workwear services business. Rentokil said the business had suffered from a significant lack of investment, an inefficient distribution structure and had pursued a "flawed commercial strategy" for many years.

Three firms expressed interest in buying all or some of Golden Wonder - the maker of Nik-Naks and Wheat Crunchies - after it went into administration; Andy Hornby, a 38-year-old former Asda executive, became one of the City's youngest chief executives after James Crosby announced plans to quit the banking group HBOS; Cable & Wireless embarked on a fresh restructuring drive after ruling out growth in its ailing UK business until 2008 at the earliest.


British Gas customers were urged to give the company "a bloody nose" after owner Centrica banked record profits just days after increasing household energy bills by 22 per cent. Earlier in the month, it was reported that Russia's Gazprom was considering the merits of a bid for £11 billion-rated Centrica as it looked to secure a stake in the UK gas market.

Dubai Ports World secured control of P&O after Singapore-based rival PSA declined to improve its offer. Dubai sparked the tussle in November when it tabled an approach worth £3.3 billion. P&O shareholders backed the takeover, but the combination faced opposition in the US amid concerns that it could compromise national security.

Two bosses of former Government-controlled military research group Qinetiq secured paper windfalls of more than £20 million after the first privatisation under New Labour. The decision to float the company led to accusations that major shareholder Carlyle and Qinetiq's executives gained their stakes in the business too cheaply.

Airports group BAA emerged as a surprise takeover target after Spanish infrastructure company Ferrovial revealed it was considering a bid; Royal Dutch Shell denied it was profiteering at the expense of consumers after annual profits of £12.93 billion - while BP disappointed investors with £11.04 billion; the owner of the Daily Mail and Evening Standard kept hold of its Northcliffe regional papers after pulling a possible sale worth £1.5 billion.


Major supermarkets were told they faced a full inquiry into suspected anti-competitive practices in the UK's £95 billion grocery sector. Business groups welcomed the Office of Fair Trading's announcement, amid concerns that pricing tactics could be distorting competition and that "land banking" prevented rival retailers from opening new outlets.

Norwich Union owner Aviva abandoned plans to take over rival Prudential following the rejection of a £17 billion bid. Aviva said its proposal to create the world's fifth largest insurer with a market value of £36 billion "would have created significant value for both sets of shareholders" but depended on cooperation from the Pru.

Chancellor Gordon Brown was warned by economists that his forecasts "erred on the side of complacency" after he predicted GDP to grow by about three per cent next year. Economists said the rosy out-look for the UK economy outlined in the Budget was too optimistic and medium-term forecasts for growth and public finances were unlikely to be met.

Gases giant BOC became the latest historic manufacturer to fall into foreign hands after accepting an £8.2 billion bid from German conglomerate Linde to create the world's biggest industrial gases supplier; attempts by a financial consortium to take control of ITV for more than £5 billion failed after the broadcaster rejected a second approach; drinks group Britvic warned sales of Tango and Pepsi were under pressure.


Sir Richard Branson sealed the breakthrough of his Virgin brand into television after a takeover deal netted him £690 million. The Virgin logo will be used for pay TV and other services provided by NTL after the cable giant secured an exclusive 30-year licence to use the brand as part of an agreed £962.4 million deal for Virgin Mobile.

Airbus moved to calm fears for the future of thousands of its work-ers in the UK after aerospace giant BAE Systems announced it was selling its stake in the aircraft builder. The company said now was the right time to offload its 20 per cent share, but the move was criticised by unions.

Almost 70 years of retailing history ended when it emerged electricals brand Dixons would quit the high street. Owner DSG International said Dixons would become an online retail operation with its 190 outlets rebranded to create a 550-strong chain selling Dixons products and household appliances from its Currys arm.

Carphone Warehouse threw down the gauntlet to BT and other telecoms firms by offering its customers "free" broadband internet access; the price of gold broke the $600 an ounce barrier for the first time in a quarter of a century, as investors continued to buy into commodities; union officials at Peugeot-Citroen raised the threat of industrial action to fight the French car giant's shock decision to close its UK factory with the loss of 2,300 jobs.


The FTSE 100 lost 4.9 per cent of its value - £74 billion - in the month, driven by fears over rising inflation and interest rates in the US compounded by movements in commodity prices which hit the value of mining stocks. The monthly performance was the Footsie's worst since January 2003.

A "day of disaster" on the employment front saw 7,300 jobs axed, including 6,000 by the end of next year at NTL following its merger with Telewest. Home shopping firm Littlewoods Shop Direct said it would close three warehouses with the loss of 1,200 jobs, while Heinz said production of HP Sauce was to be moved abroad, with the loss of 125 Birmingham jobs.

Vodafone unveiled record losses of £14.85 billion - mainly from write-downs - but won over investors with plans to drive growth from existing assets and in particular the broadband and landline markets.

BA staff shared a £48 million bonus after the airline posted a better-than-expected 21 per cent rise in annual profits; French Connection issued a third profits warning in 18 months as it conceded its controversial lesbian kiss advertising campaign had failed; M&S boss Stuart Rose said the retailer still had "much to do", despite unveiling a 35 per cent jump in annual profits to £751.4 million.


Barclays said it would axe 1,200 jobs as part of a shake-up that will also see the Woolwich name disap-pear after more than 150 years. The plans involved the closure of three offices by mid-2008, while it will change the name of the branches to Barclays from February and merge 200 Barclays and Woolwich sites.

Veteran supermarket boss Sir Ken Morrison bowed to shareholder pressure and relinquished control of the firm his father founded more than 100 years ago. The 74-year-old chairman will take a back seat after 50 years in charge as the long search for a new chief executive reached its conclusion with the appointment of Marc Bolland.

Fair competition chiefs on both sides of the Atlantic began investigating BA and other airlines over alleged price-fixing. BA said the investigation involved allegations related to "pricing of passenger air transportation, including fuel surcharges". If guilty, the airlines could face fines of many millions.

Steel giant Mittal agreed to a £17.8 billion merger with Arcelor, while a consortium led by Goldman Sachs was in prime position to buy AB Ports after its offer of £2.8 billion saw off a group led by Australian bank Macquarie; another historic brewer looked set to be taken over after Greene King unveiled a £270 million deal for 174-year-old Hardys & Hansons from the East Midlands; the owner of cricket almanac Wisden embraced one of sport's biggest innovations by buying ball-tracking system Hawk-Eye for £4.4 million.


Standard Life enjoyed a strong first session after its shares began trading on the Stock Exchange at 230p, before closing that day at 242.5p. It was good news for Standard Life's 2.4 million members. The dealings brought to an end a two-year process for the insurer which culminated in members voting in May to end more than 80 years as a mutual company.

Three former NatWest bankers accused of an £11 million fraud were flown to the US after failing to beat an extradition order. The Prime Minister said the transfer of the NatWest Three should go ahead, despite pressure to halt the process, amid fears they could be locked up in a Texas jailhouse for two years awaiting trial.

An advertising campaign fronted by Sir Alan Sugar and the lure of a second £1 million Premium Bond jackpot helped National Savings and Investments report its best sales figures since 2000. NS&I attracted 620,000 new customers in the year to March 31.

Retailers were braced for a World Cup hangover after a football-related spending surge lifted sales over the previous four months; the UK's historic china clay industry was hit after French company Imerys said 800 jobs would be axed in Devon and Cornwall; Boots and Alliance UniChem began life as a single company following their merger to create a pharmacy giant with 2,600 UK stores.


Under-pressure ITV chief executive Charles Allen stepped down after two and a half years. The broadcaster's recent poor performance was laid bare a day later when it said revenues at ITV1 fell eight per cent to £654 million in the first six months of the year. It blamed the poor advertising climate.

Cadbury Schweppes said chocolate sales were under pressure as it admitted a salmonella scare would cost at least £20 million. The group recalled more than one million chocolate bars in June after a leaking pipe at its factory in Marlbrook, Herefordshire, led to a salmonella outbreak.

The firm at the heart of the troubled NHS computer upgrade secured vital support, as its financial woes were revealed with net losses totalling £382.2 million. Manchester-based iSoft, a provider of software to allow GPs and hospitals to manage patient records, offset immediate concerns about its future when it said banks had put in place new arrangements for next year.

The future of model-maker Airfix was in doubt after its parent company went into administration and most staff made redundant; Ford said it was considering selling Aston Martin; House of Fraser looked poised for new ownership after its directors backed an offer worth £351 million from Baugur, which already owns Hamleys and the Iceland food business.


Billionaire retailer Sir Philip Green conceded that his Bhs chain had been through a "difficult" period after annual operating profits fell 54 per cent. Sir Philip, who did not pay himself a Bhs dividend for the second year running, said mistakes with ranges cost the business as like-for-like sales tumbled 7.1 per cent in the year to April 1.

Sir Richard Branson's Virgin Group said future dividends and proceeds from the sale of assets, including shares from Virgin's airline and train operations, would be invested in renewable energy initiatives. The 10-year, $3 billion commitment included further investment in biofuel research.

Struggling MFI agreed to sell its loss-making retail arm for just £1. The company offloaded the 200 stores to private equity firm Merchant Equity Partners, but will pay Merchant £74 million up to April 2008 to invest in the stores, which its manufacturing arm will continue to supply.

Airbus parent company EADS said deliveries of its 555-seater A380 superjumbo plane, whose wings are built in the UK, would be further delayed; Norwich Union owner Aviva shifted 1,000 jobs to India as it slashed its UK workforce by 11 per cent; Woolworths vowed to rescue sales in time for Christmas after plunging deeper into the red.


Carphone Warehouse became Britain's third largest broadband supplier after agreeing to buy the UK arm of AOL from Time Warner for £370 million. A day later the company's shares tumbled as the market reacted to Vodafone's decision to dump the chain as a supplier of contract mobiles in favour of Phones4U.

Thousands of families faced a bleak Christmas after hamper company Farepak stopped trading. The Government promised to investigate the collapse of the firm.

Ryanair boss Michael O'Leary shocked the airline industry by tabling a £1 billion offer to buy Aer Lingus - just a week after the national carrier floated in Dublin and London. He said the tie-up was a "unique opportunity" to form one strong airline group for Ireland, but his enthusiasm was not shared by the Irish government or staff members.

Steel maker Corus ended a year-long search for a partner by agreeing to a £4.3 billion takeover by Indian rival Tata Steel; the UK energy crisis took an unexpected twist as it emerged natural gas was being given away for nothing on the wholesale market after the UK was flooded by fresh imports from Norway; Matalan founder and chairman John Hargreaves took the dis-count retailer back into family ownership after agreeing a takeover worth £817 million.


The pound was within sight of the key $2 level as continuing fears over the strength of the US economy sent the greenback plummeting. Amid fears over slowing US business activity, sterling was above $1.97 following gains of almost 14 per cent so far in the year.

Michael Grade pledged to give his former BBC colleagues a "run for their money" after his surprise appointment as ITV's new boss. The broadcaster earlier rejected a takeover offer from NTL, amid anger in the industry over BSkyB's decision to buy a 17.9 per cent stake in ITV. NTL's biggest shareholder Sir Richard Branson called it "a blatant attempt to distort competition".

Shares in Marks & Spencer were at a record high after booming sales raised the prospect of a return to its halcyon days of billion pound profits. The stock lifted above 700p after M&S posted its best half-year results in almost a decade, following an additional 19 million visits to its stores.

Scottish Power agreed to be taken over by Spain's Iberdrola in a £11.6 billion move to create Europe's third largest utility company; Airfix was rescued after Hornby agreed to pay £2.6 million for Airfix, Humbrol Paints and Young Scientist; the Bank of England lifted interest rates to five per cent, the highest level in five years and the second rise in three months.


The owner of Branston Pickle stocked up on some of Britain's best known brands after agreeing the £1.2 billion takeover of Hovis owner RHM. Premier Foods will become the UK's biggest food producer, adding names such as Mr Kipling and Bisto gravy to a portfolio that boasts Crosse & Blackwell products and Bird's custard.

A Native American tribe was the surprise winner in the auction of the world famous Hard Rock Cafe business. The Seminole tribe of Florida has agreed to pay $965 million (£490 million) in a deal believed to represent the first purchase of a major international company by a Native American Indian tribe.

The value of BAE Systems soared after a long-running fraud probe into an arms deal with Saudi Arabia was abandoned. The Government ended an investigation by the Serious Fraud Office into a "slush fund" allegedly used by BAE to pay Saudi dignitaries to secure contracts. Tony Blair said thousands of British workers would have lost their jobs amid signs the Saudis were about to pull out of a deal for 72 Eurofighter jets.

British Gas owner Centrica pledged to cut gas and electricity bills after it said nearly one million customers deserted the company over the year.

Benson & Hedges and Silk Cut owner Gallaher backed a £7.5 billion takeover offer from Japan Tobacco; the battle for steel group Corus intensified after Brazilian firm CSN trumped a takeover offer from rival Tata.