Australia ran second to China as the most targeted nation in the Asia-Pacific region, excluding Japan, for merger and acquisition (M&A) activity during 2009, a research firm says.

Financial research firm Dealogic said in its latest M&A review that M&A activity in China totalled $US166.4 billion ($A182.38 billion) and accounted for 34 per cent of total Asia Pacific (excluding Japan) volume, matching the volume in 2008.

Merger and acquisition activity in Australia totalled $US161.1 billion ($A176.57 billion), or 25 per cent of M&A activity in the region.

Global M&A volume amounted to $US2.4 trillion, down 24 per cent on the $US3.17 trillion ($A3.47 trillion) in 2008 and the lowest annual total since 2004.

The global financial crisis slowed activity and tightened the availability of funds and forced governments to prop up their economies with stimulus packages and rescue some large corporations facing collapse.

Government-backed mergers and acquisitions accounted for $US354.0 billion ($A387.99 billion), or 15 per cent of the total global volume, and M&A activity generated by bankruptcy or distressed situations reached a record $US320.2 billion ($A350.94 billion).

The biggest government-backed transaction was the United Kingdom’s $US41.8 billion ($A45.81 billion) share placement in the Royal Bank of Scotland.

US-targeted M&A volume totalled $US783.4 billion ($A858.61 billion) – down 24 per cent on 2008 levels.

The largest US-targeted deal was Pfizer Inc’s $US64.8 billion acquisition of Wyeth in the healthcare/pharmaceuticals sector.

European volumes were down 44 per cent at $US718.5 billion, but Asia-Pacific (excluding Japan) volumes climbed nine per cent to $US493.1 billion.

The largest deal in the Asia-Pacific region was the merger of the West Australian iron ore assets of global miners BHP Billiton and Rio Tinto into a 50:50 joint venture with an enterprise value of $US116 billion or $US58 billion for each party.

Japan-targeted M&A activity fell four per cent to $US142.2 billion, with 92 per cent of volume generated by domestic deals.

The finance sector was the most targeted industry globally, followed by the oil and gas sector, and healthcare.

M&A intelligence service The Mergermarket Group said in its global round-up that 2009 was not a good year for M&A, but at the end of 2009 there were signs that the recession was coming to an end and that M&A was starting to pick up.

Mergermarket said the last quarter of 2009 was the best quarter in value terms since the third quarter of 2008.

It also said that despite frozen debt markets and reluctance by corporations to make deals, 209 saw more “mega deals” than 2008, with seven deals valued at more than $US40 billion compared to three in 2008.

“Though there is still uncertainty in the markets, there are signs that the momentum will carry into 2010,” Mergermarket said.

“A resurgence in financial sponsor activity, corporates sitting on record levels of cash, and a thawing credit market could signal a good year for M&A deal-makers.”

Business intelligence provider Thomson Reuters said in its quarterly Mergers & Acquisitions Review that for the 2009 full year, private equity-backed M&A totalled $US133.8 billion, a 43.5 per cent fall on 2008 and the slowest full year period since 2002.