The decline in the number and value of transactions has been seen particularly in cross-border mergers within the eurozone and in outward transactions by eurozone banks, the ECB said.
"In 2015 and the first half of 2016, M&A activity focused on the consolidation of the banking sector within the euro area and efforts to spread risks geographically, by diversifying into non-euro area EU countries and countries outside the EU," it said.
A steep fall in transactions is noticeable in the first half of 2016, both in value and numbers, the ECB said
"In particular, there were no inward transactions and the value of all M&A transactions for the first half of 2016 represented only 9% of the total amount recorded in 2015," it said.
From 2008 to 2015 the overall value of transactions decreased from about €39 billion to about €9.5 billion, the ECB said. In the first half of 2016, the value of transactions recorded was less than €1 billion.
M&A activity in 2015 and in the first half of 2016 "appears to be dominated by consolidation of the banking sector within the euro area and by efforts to diversify risks geographically, both in non-euro area EU member states and outside the EU. Most domestic as well as cross-border transactions recorded in 2015 and in the first half of 2016 were relatively small," the bank said.