The number of mergers and acquisitions transactions fell during quarter one but the total value of them increased, according to data from Experian.
By comparison, the total number and value of deals decreased in Europe as a whole.
The UK saw an 18.1 per cent decrease in the number UK M&A and ECM transactions announced during Q1 2010 compared to Q4 2009 from 1,131 deals to 926 deals.
GBP68.9bn worth of transactions was announced in the UK in Q1 2010 – up by 4.5 per cent on Q4 2009.
Rothschild was the best performing financial adviser by volume with 18 deals and Credit Suisse worked on the highest value of deals worth a total of GBP38.4bn.
DLA Piper advised on the highest number of transactions (21) in Q1 2010, while the leading legal adviser by value was Slaughter and May with deals worth a total of GBP37.1bn.
Europe saw an 18.7 per cent decrease in European M&A and ECM transactions announced during Q1 2010, with only 2,353 deals compared to 2,896 transactions in Q4 2009.
EUR188.7bn worth of transactions was announced in Europe in Q1 2010 – down 20.9 per cent on the EUR238.4bn recorded in Q4 2009.
Wendy Smith, business development manager at Experian Corpfin, says: “At the start of 2010, feedback from the corporate finance community was more optimistic and talked of a more realistic approach to valuations amongst vendors.
“However, the lower number of deals tells us that the market is still very fragile. Although funding has been available where strong risk free businesses have been involved, there is a still a funding gap and this is proving to be the main obstacle to getting the deals off the ground.”
In the UK a total of 68 M&A and ECM deals with a consideration over GBP100m were recorded in Q1 2010, a decrease compared to the Q4 2009 figure of 87 large deals announced. However, when compared to Q1 2009 when 57 large transactions were announced, it represents an increase of 19.3 per cent.
The deal values of large transactions have increased to GBP63.7bn, up by 11.6 per cent in comparison to GBP57.1bn announced in Q4 2009 and down by 18.6 per cent in comparison to GBP78.3bn recorded in Q1 2009.
The largest transaction in Q1 2010 was the announcement by Prudential that it has agreed to acquire AIA Group, Hong Kong, the Asian subsidiary of American International Group for GBP23.7bn.
In the mid-cap range both deal volumes and values decreased in Q1 2010 compared to Q4 2009. A total of 135 transactions worth GBP4.4bn represented a 40.5 per cent and 43.4 per cent decrease respectively in volume and value terms on the 227 deals valued at GBP7.8bn recorded in the previous quarter.
Volume and value figures were also down year-on-year. In Q1 2009, 145 transactions worth GBP5.6bn were recorded.
One of the largest deals within the segment was the acquisition by Redditch-based Halfords Group of Nationwide Autocentres Holdings in Solihull for GBP73.2m.
Small deals accounted for 229 announced transactions and a deal value of GBP669.6m in Q1 2010, in contrast to 313 deals worth GBP945.7m in Q4 2009.
In comparison, during Q1 2009 a total of 244 small deals accounting for GBP745.4mn were announced.
One of the most notable deals was the GBP9.9m acquisition of Veterinary Enterprises & Trading by Norfolk-based CVS Group.
