In the first nine months of the year, announced M&A deals totalled some US $2.37 trillion (£1.34 trillion) down from a record $3.29 trillion over the same period last year, according to Bloomberg.

The decline in M&A is attributed to the credit crisis, which has restricted funding in general, as US and European economies face the fear of recession.

“The M&A market is all but frozen while politicians around the world grapple with the economic crisis,” said Simon Collins, head of corporate finance at KPMG.

“With the debt market virtually inaccessible, deal paralysis has also spread into sectors such as energy, which were until recently considered resilient to the world’s economic woes.”

The value of US mergers has dropped 35 per cent over the same period, while deal-making in Europe and the Middle East has plunged 28 per cent. M&A activities have increased by 11 per cent in Asia, excluding Japan, pointing to the continent as a survivor of the deep freeze of economic crisis.