Mergermarket data finds signs of life in Asia and US, but there's slim pickings in Europe

M&A activity has picked in recent weeks but, as the latest statistics show, it couldn't have come off a much lower base, in Europe at least. The plain fact is that the third quarter M&A figures from Legal Week's exclusive data provider Mergermarket make for depressing reading.

M&A levels in both the UK and Europe fell to their lowest point since the end of 2002 during the three months to the end of September. For Europe this translated to just 696 deals, worth $73.2bn (£46bn) in Q3 – way down on the 1,234 deals worth $318bn (£199bn) announced in the same period during 2008. In the UK, the figures look worse still – with just 127 deals worth $15.5bn (£9.7bn) – little more than half of the 236 deals worth $95.7bn (£60bn) announced in the same period the previous year.

While table leaders Freshfields Bruckhaus Deringer and Linklaters did well to maintain their positions (heading the European tables by value and volume respectively), they didn't need to notch up many transactions to do so, with the total deal tally giving an indication of just how quiet corporate teams across the UK have been. With so few deals to share around, the impact on mid-market firms is clearly evident in the UK rankings. Linklaters heads the UK volume rankings for the first three-quarters of 2009 with roles on just 47 deals – a tally that would have left it outside the top 10 in 2008.

For a firm that has made much of its desire to focus on key international work for the biggest clients, it is not a position you would expect it to hold, with traditional volume leaders in the UK, such as DLA Piper, being knocked lower down the rankings.

Indeed, with magic circle firms making up four of the top five spots in the UK by volume so far this year, Eversheds, Osborne Clarke, Pinsent Masons and Travers Smith are just a few of the firms seeing their positions in the rankings fall. Little wonder that many partners concede they have never experienced such a difficult deal market in their entire careers.

DLA Piper's Andrew Holt (pictured) comments: "It's still hand to mouth if you do corporate work right now. Although there are some signs that 2010 might see more activity, I'd say we've all suffered and seen great pressure on pricing."

At least there are some relative bright spots globally. In the Asia-Pacific region, deal volumes increased during quarters two and three. With 518 deals in Q3 2009, they are now not far behind where they were at this point in 2008. Similarly, while US deal volumes dipped marginally in Q3 they were still significantly higher than they were during Q1 this year, and remain up on Q4 2008.

Partners are optimistic that the same pickup is now coming to the UK. That said, given how far activity levels have fallen across the UK and Europe, it's going to take a very long time for levels to return to anything like what's required to keep corporate teams across the country busy. Freshfields corporate head Mark Rawlinson, at least, can see past the gloom: "There is the occasional oasis in the desert, and there does appear to be more about now than there has been for a long time." Here's hoping.