The Predictor, a forward looking survey of 1,000 of the largest international companies, confirmed that prospective valuations had declined significantly across all regions, while balance sheet capacity had also deteriorated.

KPMG observed that the fall in valuations would stimulate an appetite to do deals, especially among companies with cash, sovereign wealth funds and private family offices.

Stephen Barrett, corporate finance international chairman at KPMG, said: “Our detailed analysis of the results of KPMG’s Predictors, coupled with historic M&A cycle trends, leads us to believe that there are indications that the corner may well be turned late in the second half of the year.

“I believe that those people who ended 2008 feeling battle fatigued in the face of endless bad news stories have stared the New Year with a desire to kick-start the deals market – something that may be facilitated by the opportunities that will inevitably emerge for value investors in certain regions and sectors,” he added.