UK business
The total value of UK mergers and acquisitions abroad fell drastically by 94 percent in the first quarter (Reuters)

UK company mergers and acquisitions has stalled and lucrative M&A activity abroad frozen as the recession bites down on British business and increased uncertainty surrounds the crisis-mired eurozone.

The total value of inward, outward, and domestic acquisitions all dropped in the first three months of the year, with expenditure by UK companies on acquisitions abroad hitting its lowest level since records began in 1987, according to the latest official data.

"Overall the value of mergers and acquisitions involving UK companies remains low," said the Office for National Statistics (ONS).

Outward acquisitions - the purchase by UK firms of businesses abroad - fell in value to £700m in the first quarter, a staggering 94 percent drop from £12.6bn in the last three months of 2011.

"The reason for the relatively low value of acquisitions abroad by UK companies is unclear although concerns relating to the eurozone sovereign debt crisis and confidence in economic growth are likely to have played their part," the ONS said.

The value of acquisitions in the UK by foreign companies, known as inward acquisitions, plunged to £3.9bn in the first quarter, from £12.4bn in quarter four.

It is the lowest value reported since the second quarter of 2010.

Domestic acquisitions - acquisitions in the UK by other UK companies - fell to £1.1bn from £1.8bn quarter-on-quarter, the lowest value since 2009.

Britain is back in recession after two successive quarterly GDP contractions of -0.3 percent, from the final quarter of 2011 to the first three months of 2012.

Europe, the UK's biggest trading partner, has seen several of its member states plunge into recession, as the eurozone single currency area within the EU struggles to secure its future with political and financial crises taking their toll.