New figures released by the M&A database Zephyr show that the value of M&A deals fell from $551 billion in July to $171 billion in August.
European deals have fallen by 69 per cent from $231 billion down to $70 billion, but it is the US market that has suffered the worst.
The US market dropped 73 per cent, from $165 billion in July down to $44 billion in August.
The global market had been in a period of sustained growth until the crisis occurred.
Speaking to City AM, Zephyr commercial director, Lisa Wright, said: "There is much speculation about how long the credit crisis will last and the true extent of its impact but early indications suggest a tougher time ahead for the M&A market, at least in the short term."
There were exceptions to the general slump, with Britain seeing M&A deals rise in value.