A sigh of relief amongst corporate lawyers has been heard as activity in M&A continues to gather pace. With the slump in M&A volumes since the beginning of the credit crunch in the autumn of 2007, advisers are daring to hope that  volumes will pick up - even if nowhere near the levels around 2007  thanks to mega-deals such as the £47m bid for Dutch bank ABN AMRO.

One reason why the credit crunch has had such a profound effect on M&A is the role played by private equity houses in the pre-crunch boom. As recently as 2004, the private equity industry was speculating about when the first £1bn takeover would happen. By 2007, the value of the record private equity buyout was almost £22bn and almost no company, whether a member of the Fortune 500 or the FTSE100 was immune from the attentions of the private equity houses.

However, as the availability of credit has diminished and its cost increased, the debt-driven private equity deals have all but disappeared while at the other end of the process, investor nervousness has made flotations very difficult to get away.

Into the breach have stepped Sovereign Wealth Funds (SWFs) from the Middle East, Singapore and China, which have been finding opportunities in depressed company values. For this reason, the fall in takeover levels has been far from even, with Asian markets in particular remaining fairly robust. The focus of attention has shifted towards the Far East  as a source of capital, acquisition targets and, increasingly, the home of acquisitive multi-nationals, such as the Indian conglomerate Tata Group. The Middle East has had its own share of problems, particularly in Dubai, but there are hopes that activity is picking up.

The boom on mergers has also been helped by the gradual erosion of restrictions on takeovers in many countries and the banning of 'poison pill' defences by targeted companies. However, many initiatives aimed at making takeovers easier, most notably the European Union's takeover directive, have faced heavy political opposition have been substantially watered down and concern about the activities of SWFs, combined with an economic downturn in the developed economies of the West, means that talk of protectionism is in the air again in both Europe and the US.

A further constricting effect on the market comes from the increased stringency of corporate governance rules and securities regulation worldwide – and in the US, the risk of litigation.

Nevertheless, what is unlikely to change is the international nature of big ticket M&A transactions, which has led to most deals being governed by either English or New York law. This has meant that the top end of the market in recent years has become dominated by the big US and UK firms, which are now rapidly investing in China, the Middle East and other parts of Asia as the real action in M&A moves east.