Mergerstat LP reviews a brutal third quarter for M&A activity, seeing 2001 as the worst year for M&A since 1997.

Dealmakers announced just 1,699 domestic and cross-border transactions for the quarter, the lowest level of overall M&A activity in almost five years. The M&A market may not surpass 8,000 transactions for the year after recording 9,278 transactions in 1999 and 9,566 transactions in 2000, it says.

Just $225.7 billion in announced deal value was recorded in the quarter, and a good chunk of this is dependent on two large deals. This compares to $397.5 billion in the third quarter of 2000. Still, it’s up from the $187.5 billion total for the first quarter and the $181 billion for the second quarter of 2001.

“Twelve months ago, the top financial and legal advisors were racking up record fees as they advised on one megadeal after another. In the third quarter of 2000, dealmakers reported a record-breaking 61 transactions disclosing a total deal value of $320.2 billion. Today, the blockbuster deals have dried up by almost 50%. For the third quarter 2001, dealmakers reported just 32 megadeal transactions disclosing $175.8 billion.”

The firm sees an across-the-board slowdown in activity in 38 of the 49 industries it tracks. Deal activity for 33 industries slowed relative to the second quarter of 2001.