Global mergers and acquisitions activity plunged 28% in the first quarter to its lowest level since 2016 as the devastating economic effects of the coronavirus pandemic took hold in March.

This only compounded a slow start to the year for dealmakers. 

Deal activity in the US dropped by half to $252 billion in the first three months from a year ago, driving global volumes down to $698 billion from $964 billion in the first quarter of 2019, according to Refinitiv data. 

Asia volumes dropped 17% year-on-year to $142.9 billion. 

Europe saw its deal volume more than double to $232 billion thanks to a handful of mega-deals clinched just weeks before the virus started battering the continent's economies. 

With large swathes of the globe shut down, the M&A pipeline remains patchy and likely to be dominated by rescue deals, restructurings and nationalisations as governments and central banks try to shore the economy up. 

"This crisis is unique. It is something that our generation has never witnessed before," said Luigi de Vecchi, chairman of EMEA banking capital markets advisory at Citigroup. 

"When stock markets tumble 30% you need to hope to renegotiate a deal if you have the contractual ability to do so. However, if you haven't reached an agreement you are likely to delay the signing until you have better visibility," he said. 

Russia used its National Wealth Fund (NWF) to finance this quarter's biggest deal - the $39 billion purchase of the country's largest lender Sberbank. 

Other big deals included insurance broker Aon's $30 billion all-stock takeover of rival Willis Towers Watson and the $18 billion private equity-led buyout of Thyssenkrupp's elevators business. 

"We have seen the number of deals announced globally drop 43% year-over-year in the last two weeks," said Bank of America's global M&A head Patrick Ramsey, adding the downward trend was expected to continue into the second quarter. 

"Once we get to the back-end of this, we will see a meaningful snap-back in activity. The degree of that snap-back will depend on the economic outlook and equity market recovery," Ramsey said.