There was a total of 473 mergers and acquisitions involving Brazilian companies in 2006, up from 363 in 2006, it said.

"Mergers and acquisitions have been on an upward curve during the whole of 2006 and this trend is set to continue in 2007," said Andre Castello Branco, a KPMG director.

Cross-border operations represented 61 percent of all operations in 2006.

There was a growth in Brazilian companies acquiring foreign assets in 2006. In total, some 118 of these operations occurred, up 96 percent on the year before.

Among those deals were the purchase of Canadian nickel miner Inco by Companhia Vale do Rio Doce, or CVRD, and a joint venture between Gerdau Ameristeel Corp. and steel contractors Pacific Coast Steel Inc.

The most active sector in terms of mergers and acquisitions was the energy sector with 61 transactions, followed by the information technology sector, with 46 transactions.