The coronavirus has had major implications on the global financial markets.

March was the worst month for European M&A volumes since August 2010 and was the worst March since the financial crisis, according to the latest data.

Just 329 deals were done in March, down from 496 in February and 620 in March of last year, according to Mergermarket. Deal values for the month, however, stayed high with a total value of $75 billion.

One senior M&A partner said that the high value figures could have been lifted by the closure of some mega-deals earlier in the quarter, such as the $30 billion tie-up between insurance giants Aon and Willis Towers Watson and the sale of the elevator unit of German conglomerate ThyssenKrupp to a consortium private equity firms that includes Advent International and Cinven for $19 billion. Most of the talks on both deals took place pre-pandemic.

In the first quarter of 2020 there were 1,387 M&A deals with a combined value of nearly $200 billion. In the first quarter of 2019, there were 1,937 deals with a total value of $153.2 billion.

Bob Bishop, global co-chair of DLA Piper's corporate group told Law.com International's Legal Week that he was "not surprised at all by the numbers".

"In December, January and early February, people were still optimistic and hoping that the situation would improve, that the spread of coronavirus wouldn't be as ferocious as it threatened to be, and, as such, deals were still going ahead," he added.

"Things really started to change in the second half of February and into early March. There was a very clear realisation that the spread of the virus couldn't be limited as much as people hoped it would be. Pretty soon, once a lockdown looked inevitable, M&A discussions really started to tail off."

Several M&A lawyers said that they had seen a sharp fall in the number of instructions for transactional work from key clients. Bishop said that this was due to 'firefighting' by clients who are looking to solve their own internal issues.

"We are facing a triple threat of uncertainty, bandwidth and liquidity. Uncertainty comes in the form of how long the current situation will last and how hard [coronavirus] will hit operating results and balance sheets," he added.

As a result, M&A activity has taken a backseat, but M&A lawyers are continuing to be called upon by clients to provide guidance on a range of internal matters.

"The majority of our deals have paused or slowed and the prospects look gloomy"

"March was an alarming month for our clients and we've been engaged on crisis work, trying to help in every way we can," said Andy Ryde, head of Slaughter and May's corporate practice.

"Clients have been focusing on coping with the disruption, physical and financial health, liquidity issues and, in many case, survival of their businesses and so M&A has taken a back seat. There are some notable exceptions but the majority of our deals have paused or slowed and the prospects look gloomy."

M&A lawyers also predict a further hit to the European M&A market as the number of coronavirus cases in the U.S. continues to climb, signalling a slowdown in the level of U.S. inbound investment.

DLA's Bishop said: "The U.S. is behind Europe in terms of the spread of the pandemic. They will experience the worst of it after Europe does. It's a big country with a lot of people operating under different regulations at both state and federal levels.

"If the US suffers, the rest of the world suffers with it. It is such a significant economy. How the US copes with the next 4-6 weeks is going to be absolutely critical for the global M&A market."

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