The proportion of takeover talks involving listed companies that end in a successful deal has almost returned to pre-credit crunch levels, research has found, signalling a greater confidence in the mergers and acquisitions (M&A) market as lawyers succeed in driving deals through.

A failure rate for M&A bids in the third quarter of 2009 of 29% represented the lowest for two years, according to research by corporate firm EMW Picton Howell. At its peak in the first quarter of 2009, the failure rate was 58%, the research found.

M&A specialists in the City said that the findings roughly reflected their current experience of the M&A market.

Nigel Boardman, partner at magic circle firm Slaughter and May, said that disagreement over a company’s ­valuation following turmoil in the markets and competition issues were the main reasons for failure.

Teja Picton Howell, principal of EMW Picton Howell, said: ‘As confidence in the economy returns, bidders are more willing to make offers at the kind of price that their target’s board and shareholders will accept. We expect fewer sensibly priced deals to collapse just because the bidder gets cold feet.’

On Tuesday, the board of chocolate-maker Cadbury approved an £11.5bn takeover by US food giant Kraft, after Kraft had failed with earlier bids. Several City firms will profit, including Clifford Chance and Slaughter and May.