European M&A deal volume fell to its lowest level since 2013 during the first half of 2018, despite a surge in high-value transactions, according to new data from Mergermarket.

The latest figures from the data provider show that the total number of European deals fell to 3,199 during H1 2018, down from 3,856 in the same period last year – a fall of 17%. Deal volumes in Q2 this year stood at just 1,478 – a fall of 14% on the first quarter of the year and representing the slowest activity levels since Q3 2013.

At the same time, total deal values in the first half of the year rose to their highest level for more than 10 years. Mergermarket tracked $600.9bn (£453.6bn) of European deals during the period, representing a 21% increase on the previous year and the largest six-month deal tally since just before the financial crash in 2007.

Freshfields Bruckhaus Deringer topped the European value rankings, advising on 89 deals worth $246.5bn (£186.1bn), just ahead of Linklaters, which advised on 77 deals worth $242.8bn (£183.2bn).

Freshfields' mandates in the six-month period include advising Comcast on its £40.7bn purchase of Sky, alongside Davis Polk & Wardwell, in what was the largest UK deal of H1 and the third-largest deal in Europe.

Linklaters, meanwhile, played a role on the largest deal in Europe and – Japan's Takeda's $79.7bn (£60.1bn) bid for Irish drug company Shire, a deal that also generated roles for firms including  Davis Polk & Wardwell, Latham & Watkins and Slaughter and May.

Freshfields co-head of the global M&A client group, Bruce Embley, said: "The M&A market is at a very interesting stage and is absolutely buoyant – debt markets are as liquid as you could imagine and, driven by disruptive new technologies, we've seen companies engaging in ambitious cross-sector deals – such as AT&T's acquisition of Time Warner, and Amazon and Wholefoods.

"There are a few things you need for big-ticket M&A deals. A relatively conducive regulatory and political market and ready access to debt and equity capital. But also investor confidence."

Andy Ryde, who heads fourth-placed Slaughter and May's corporate practice, said: "It's been a very busy M&A market in which we've seen a resurgence of large deals. A lot of deals are in the £5bn to £20bn range, a sign of a hot M&A market… Since last September, it has been really busy."

Looking at the volume rankings, DLA Piper advised on the largest number of European deals, with roles on 143 transactions worth $58.7bn, significantly above second- and third-placed CMS and Allen & Overy, which advised on 103 and 101 deals respectively.

The drop in deal activity was slightly larger in the UK than Europe, with total deal numbers falling from 791 in  H1 2017 to 629 in the same period this year – a drop of 20%. Total value meanwhile increased from $93.4bn (£70bn) to $147.4bn (£111bn) year on year – a 58% jump.

UK firms reclaimed the top spots in the UK value rankings from their US rivals in H1 2018. Freshfields ($100.5bn), Herbert Smith Freehills ($85.1bn) and Slaughters ($79bn)  took the top three places, compared with Kirkland & Ellis, Simpson Thacher & Bartlett and Davis Polk & Wardwell this time last year.

CMS topped the UK value rankings with roles on 50 deals worth $28.9bn, with DLA Piper and Eversheds Sutherland rounding out the top three.

Charles Currier, co-head of the CMS UK corporate practice, said: "We're not seeing a slowdown in the M&A market. While there may be fewer deals, we've not seen less work, which might echo fewer but bigger deals."

Travers Smith corporate partner Richard Spedding backed this up, adding: "Ever-increasing competition is driving larger corporate players to consolidate their respective industries – and also to seek complementary bolt-ons to broaden their offering."

Looking at the global rankings, Davis Polk & Wardwell topped the value rankings, with roles on 73 deals worth $314bn. Freshfields and Linklaters both feature in the top five globally, with Freshfields in third place and Linklaters in fourth. In total, six UK firms made it into the top 20 by global value. Kirkland topped the global volume rankings, ahead of DLA Piper and Jones Day.

Global deal volumes fell by 11%, against a 28% increase in value.

Looking forward, many expect the M&A market to remain robust but there are concerns about the impact of Brexit further down the line.

DLA Piper M&A co-chair Jon Kenworthy said: "The longer we go without clarity on what the next step is, I think you'll see increased nervousness from business and this may lead to reined-in M&A activity from firms."

Latham co-chair of global M&A Ed Barnett said: "There is a question over the change in global interest rates and how that might impact the cost of doing M&A. We could also see Brexit uncertainty start to cool the market towards the end of the year."

However, he added: "I think the market appreciates that uncertainty is the new norm. There are plenty of opportunities out there for acquisitive companies eyeing up expansion or consolidation and there remains a great deal of PE money to be deployed."

M&A partners on Brexit: 

Freshfields partner Bruce Embley: "M&A has already factored Brexit into its pricing. When you look at geopolitical shocks, there are far bigger issues for the market [than Brexit], such as the trade wars."

Travers partner Richard Spedding: "Brexit continues to loom but the timelines and implications remain hard to unpick. I think that corporates and PE funds are therefore deciding that there is no point waiting to see what pans out, given the opportunities they may miss in the meantime. It's not been lost on people that we are nearing the Q1 2007 high watermark for M&A, but at the moment there seems to be 'safety in numbers' among the buy-side community."

Slaughter and May M&A head Roland Turnill: "With the outline of the Brexit transition deal apparently settled, clients saw a window of opportunity to get things done. But it may become less stable – things might slow down."