The volume of mergers and acquisitions in Europe next year is expected to top the $1.7 trillion (€1.3 trillion) done in 2006, according to a report issued by Standard & Poor's Equity Research.

The report said European M&A activity should increase about 12% next year. This upward trend is expected to increase in coming years because there is a great deal of cheap financing available for acquisitions. Acquiring firms tend to use cash 80% of the time to finance a deal.