Mergers and acquisitions in the defence and aerospace sector have reached the highest level on record, with the aggregate global deal value topping $43.7bn, PwC has said.

In 2002, there were only 173 deals, valued at $12.9bn (£7.6bn). Both the deal value and volume has broken all previous figures over the past ten years.

Recently, firms operating in the commercial aerospace sector have struck several unprecedented large deals, including an order by Norwegian Air Shuttle ASA for 222 Boeing Co. and Airbus SAS airliners valued at 127bn Kroner (£13.5bn).

The primary driver of deal value in 2011 was a $16bn (£10.1bn) transaction, the largest in sector history according to PwC’s combined M&A review and analysis report. Both smaller deals (less than $50m) and mega deals (above $1bn) were key volume drivers.

Six ‘mega deals’ were made in 2011, up from just two in 2009. These boosted the rise in average transaction sizes, even without the impact of the $16m (£10.1) deal.

There was also a sizeable increase in deals for aerospace targets in 2011 in both volume and value, while the number of defence deals decreased.

PwC’s global head of aerospace & defence, Neil Hampson said: “This record level of A&D [and] M&A deal activity we’ve seen in 2011 could go even higher in 2012 and commercial aerospace is clearly benefiting from tailwinds that are likely to attract further investment.

“On the defence side, it is clear that despite the extent of cutbacks constraints competition among Western contractors for smaller defence budgets will become more intense,” he added.

Entities based in the US were responsible for the bulk of the high value global aerospace & defence deals made last year, but cross-border deals also increased in 2011. BRIC countries are said to be keen to increase their market share this year.

China in particular is expected to take advantage of its level of domestic demand and technological help from Western suppliers and companies.