Mergers and acquisitions have reached their peak as the number of new deals is forecast to slow, according to KPMG.

‘Global activity is about to peak, certainly in terms of deal volume, and we foresee a continued fall in deal numbers during the course of 2007,’ says Stephen Barrett, KPMG’s international chairman of corporate finance.

During the first six months of the year, the volume of M&A activity worldwide increased by 50 per cent to reach $2,780bn (£1,390bn), according to Dealogic. The average deal size also rose by 58 per cent to $298m, the highest on record.

KPMG said that while several large financing for leveraged buy-outs had been put on ice due to turmoil in the credit markets, the rising valuations were proving a ‘headwind’ for other deals.