European takeover activity will shoot back up to the bumper levels of 1999 and 2000 after shrinking by half last year, according to leading fund managers.

Last year, M&A deals worth $700bn (€784bn) were announced, less than half the $1.5 trillion deals in both 1999 and 2000. However, fund managers believe this dip will prove to be temporary and are predicting a blowout year in 2002.