A total of €18.9 billion was spent on mergers and acquisitions in Ireland last year, according to law firm William Fry.

That was down 26% on figures from 2012, although the number of individual deals did increase marginally from 80 in 2012 to 82 in 2013.

Almost all of last year's activity saw foreign companies buying Irish entities with some engaging in "reverse takeovers", where an overseas firm moves its headquarters here after buying a local player.

Nearly two thirds of the money spent last year was in the pharmaceutical industry, with the acquisitions of Warner Chilcott and Elan topping the list in terms of value.

The sale of state assets - or the assets of State-owned banks - also boosted the figures, most notably through the sale of Irish Life, AIB's Ark Life business and the Bord Gáis Energy division.

William Fry said the increased volumes was driven by a number of factors, including an increase in large scale deals, making, the country's attractive corporate tax environment and the strong presence of foreign buyers. 

"The Irish M&A market continues to show signs of sustained recovery. While deal value in 2013 dropped considerably, the market remains in a stable and healthy condition having moved on very significantly from the lows seen in 2009," commented Byran Bourke, a Partner and Head of Corporate & M&A at William Fry.

"There are ongoing challenges but there have been a number of positive developments. In addition to the very significant amount of foreign investment we have seen in the Irish real estate market and sustained activity in M&A, in late 2013 Moody’s upgraded Ireland’s rating to investment grade for the first time since 2011," he stated.  

"The M&A market in Ireland is showing signs of recovery across a variety of sectors, particularly TMT and Pharma/Medical/Biotech and we expect this to continue in 2014," he added.