European M&A activity has plummeted in Q3 according to the latest data from mergermarket, dropping to volume levels not seen since Q4 2004.

Activity is down some 35 per cent on the same period last year, with a total of €159.8bn worth of deals completed in the quarter, the lowest value level since Q1 2005.

Freshfields Bruckhaus Deringer has topped the Q3 league tables of advisers by value for the period 1 January to 21 September 2006, advising on 189 deals with a total of €261.5bn.

Freshfields had key roles in two of the three biggest deals of July and August, advising on the €29.6bn Italian banking merger between Sanpaolo and Banca Intesa and on Construcciones Reyal’s €3.3bn takeover bid for Immobiliaria Urbis.

It’s the first quarter of 2006 Skadden Arps Slate Meagher & Flom has not topped the table, coming in fourth in the league table ranked by value with 59 deals worth €179.6bn

Clifford Chance again topped the pan-European volume league table, advising on 212 deals in the year to date, ahead of Freshfields and Linklaters, both of which advised on 189 deals.

The magic circle continues its grip over the European M&A market with Allen & Overy holding fourth spot on the volume league table with 162 deals ahead of DLA Piper with 141.