This year is set to one of the best in a decade for offshore mergers and acquisitions, a top law firm predicts.

Deals worth nearly $8.5 billion were done in Bermuda alone during the third quarter of the year — a total of 89 transactions with an average value of $95 million.

That represented a three per cent increase on the previous quarter and a 29 per cent increase on the same period last year.

The prediction came despite a worldwide dip in the value of offshore deals in the third quarter of the year — although Bermuda logged “modest increases” in deal value and volume for the quarter compared to the previous three months, while value was up substantially compared to the third quarter of 2013.

The report — prepared by law firm Appleby — said offshore jurisdictions saw a 46 per cent drop in total value of deals in the third quarter compared to the previous one.

But the firm said that deal value jumped by a quarter compared to the same period in 2013.

Appleby partner and group head of corporate and commercial for Bermuda Timothy Faries said: “Bermuda remains an attractive destination for offshore deal-making, experiencing slight increases in both the number of local deals and their total value in the third quarter of 2014.

“Globally, this year looks set to be one of the best years for offshore mergers and acquisitions for some time, perhaps for the past decade, with Bermuda as an important contributor.”

Appleby partner and global head of corporate and commercial Cameron Adderley said: “Overall, the year 2014 is set up to be a peak year for the value of deals conducted in our offshore markets.

“The first three quarters of the year have a combined total deal value north of $200 billion, which has only been exceeded in two years over the last decade.

“This year should surpass even those two annual totals when the quarter four numbers are included.”

The financial and insurance sector regained its spot as the busiest sector, after being overtaken in the previous quarter by information and communications and manufacturing.

Around the world in the third quarter, 626 offshore deals were announced involving offshore targets with a total value of $48.1 billion.

There were 667 deals done in the second quarter extending a 600 plus transactions a quarter which started in 2013.

The average global deal in the third quarter was worth $77 million, making it the fifth most prosperous quarter for average deal size since the start of 2010 — a period of nearly 20 quarters.

Globally, an average deal worth of $102 million was recorded for the first three quarters of this year — matched only by the pre-recession boom year of 2007, when the average deal value was $100 million.

There were two transactions worth more than $2 billion and nine worth more than $1 billion.

But the Appleby report added that deals worth less than $100 million made “a significant proportion” of the quarter’s expenditure on mergers and acquisitions.

The report said that was “a welcome return of activity in the lower end of the value chain”.

While the bulk of the report focuses on international acquirers buying offshore assets, it also looked at outbound deals in which an offshore jurisdiction acted as an acquirer. A total of $61.7 billion was spent overseas by offshore companies this quarter, including ten deals worth in excess of $1 billion.

China was the main target for offshore outbound deals and there were 11 outbound deals for Russian targets — going against the tide of opinion that Russian business would slow down.