The value of global takeovers dropped to the lowest level inmore than a year this quarter, and dealmakers say Europe's debtcrisis may hamper a recovery in 2012 as cash-rich companies holdoff on major purchases.

Mergers and acquisitions have slumped 16 percent from theprevious three months to $457.1 billion, putting the fourth quarteron course to be the slowest since at least mid-2010, according todata compiled by Bloomberg. For the year to date, announcedtakeover volume has risen less than 3 percent to $2.25 trillionafter regulatory hurdles scuttled AT&T Inc.'s bid for T-MobileUSA, which would have been 2011's biggest deal.

Tightening credit markets, the risk of a euro-zone collapse andstock market swings have deterred companies from pursuingtransformational deals that would spur sales growth, M&Abankers said. Earlier in 2011, more favorable conditions emboldenedacquirers to part with stockpiled cash, such as Johnson &Johnson's $21.3 billion bid for Synthes Inc. and Express ScriptsInc.'s $29.1 billion offer for Medco Health Solutions Inc.