Conditions for mergers and acquisitions are now the strongest in recent history with strong prospects for 2012, according to Deutsche Bank, despite global M&A volumes for the fourth quarter sinking to their lowest level since 2004.

Stephan Leithner, co-head of investment banking, coverage and advisory at Deutsche Bank, said in a report that the bank's M&A affordability index, which measures debt financing costs, growth expectations and other variables, indicates that conditions for M&A are now the "strongest in recent history".