European mergers and acquisitions activity has surpassed last year's record despite a third-quarter slump in private equity-backed deals following the global liquidity crunch.

The value of European M&A hit $1.8 trillion (€1.3 trillion) during the first nine months of the year, outpacing the previous record of $1.6 trillion set in 2006, according to preliminary data from Thomson Financial, an investment banking data provider.