Merger and acquisition activity rose again in the fourth quarter, the third rise in a row, according to the latest data from Crosbie & Co.

The firm reports that there were 254 transactions announced in the fourth quarter of 2009, worth almost $33 billion. This represents a 9% increase from the previous quarter, and it was the highest level of activity in the last five quarters.

Mid-market deals (transactions under $250 million) accounted for 91% of all announcements, and there were only five deals over $1 billion in the quarter.

“Following a rather auspicious start to the year, conditions for getting transactions closed improved steadily in 2009 and, as a result, we ended on a relatively positive note,” said Colin Walker, managing director at Crosbie & Co. “Factors contributing to the higher activity included greater confidence in the economic outlook, improving valuations, and greater availability of financing in many market segments.”

Cross border activity also remained strong, Crosbie says, representing 41% of the deal activity. Indeed, it notes that three themes that were evident throughout the year were also observed in the fourth quarter: international acquisition activity by Canadian buyers, increased acquisition activity involving government related entities (especially among larger deals), and strong activity in energy related sectors.

Of the 10 largest transactions in Q4, seven were cross border deals, three were energy related, and three involved government related entities. For the full year, the value of foreign acquisitions by Canadian buyers doubled to $41 billion.

The oil and gas sector continued to lead all industry groups in M&A activity during the quarter, with 66 transactions in the quarter representing $8.8 billion or 27% of total transaction value. Real estate was the second most active industry group in the quarter, posting 41 transactions worth $1.9 billion, followed by the industrial products sector with 37 transactions.

IE