We all knew that deal volume was down this year, especially in the private equity world – but the value of cancelled deals so far in 2008 is actually nearly as large as the value of deals completed. And that's not even counting the reasonably likely scenario of the BCE takeover falling through.

The value of cancelled merger deals for this quarter is closing in on the value of deals actually completed and the two measures will draw level if the mammoth takeover of Canadian telecommunications group BCE falls through.

With BHP Billiton dropping its bid for Rio Tinto last week, the dollar value of merger deals cancelled so far this quarter rose to $322bn compared with $362bn in completed M&A transactions, data from Thomson Reuters show. The last time the value of completed deals was so low in comparison with cancelled deals was in the first quarter of 1987, and this quarter could ultimately prove worse.

Announced M&A activity is down 27 per cent in the year to date compared with 2007, and the quarterly rate of withdrawn deals has hit its highest point since 1993.

The rate of deals collapsing has increased since September in a rapid unwinding of last year’s merger market fervour, amid the credit crisis near-paralysis and global equity market volatility.

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