Despite early predictions of robust deal making for 2005 and a few high-profile deals, merger and acquisition activity fell in the first quarter, both nationally and locally.

Mergers involving Los Angeles-area companies as either buyers or sellers fell to the lowest level in two years, according to data from Factset Mergerstat LLC.

Announced deal value involving local companies fell 39 percent in the first quarter to $1.7 billion from $2.8 billion in the year-ago period, Mergerstat said.

The first-quarter drop is even steeper when compared with the fourth quarter, when a handful of multi-billion-dollar deals in Los Angeles pushed dollar volume to $10.6 billion.

Nationwide, the value of announced deals in the first quarter fell 12.7 percent to $243 billion from $278.4 billion in the first quarter of 2004.

Dissecting the meaning of announced deal value can be tricky, because two-thirds of the companies that announce deals do not disclose dollar values so the actual value is always higher than the amount reported.

However, nationwide deal volume fell in the first quarter as well to 1,986 merger agreements from 2,066 in the year-ago period.

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The full version of this story

is available in the April 11 edition of the Los Angeles Business Journal.