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USA, Singapore, UK, Canada and Germany make up top five in latest annual index of the most attractive Mergers & Acquisitions markets

USA retains top spot in Bayes Business School M&A markets annual index - but India, Russia and China among nations to drop down the league table

CITY UNIVERSITY LONDON

The United States remains the most attractive destination globally for inbound and domestic mergers and acquisitions (M&A) investment, according to the annual index published by Bayes Business School (formerly Cass), City, University of London today.

The country scored 73 per cent in the latest index – four points ahead of second-placed Singapore, and six points more than the UK in third.

Canada dropped one place to fourth out of the 148 nations measured by Bayes’ Mergers and Acquisitions Research Centre (MARC).

Germany, France, South Korea, The Netherlands, Norway and Australia complete the top ten.

The index assesses countries against 19 indicators, ranging from political stability and roads to access to financing and demographics.

Co-author Dr Naaguesh Appadu, Research Fellow at Bayes, said: “Most governments are dealing with multiple challenges, all of which affect their local and in-bound M&A markets. Many, for example, are grappling with achieving monetary policy stability to control inflation. At the same time they need to understand and support investment in the tech sector through ongoing innovation, technology advancements and workforce development, particularly in field of AI, which also has critical impacts on productivity and the economy.

“With the high cost of capital, acquirers are shifting their focus towards smaller mid-market transactions. These deals are easier to execute, less risky to finance and potentially more feasible given current financial conditions.”

The USA has topped the MARC M&A Attractiveness Index Score (MAAIS) since it was first published in 2009. The index records both annual movements up and down the league table and movements over five years.

Other headlines from the latest index include:

• While Germany and France both remain in the top ten, since 2018 Germany has slipped two places while France rose one place. China, in 14th position, fell two places last year and is down three places on 2018.
• India has risen nine places to 40th since 2018, despite falling five places last year.

• Russia, perhaps unsurprisingly, fell 18 places last year to 55th.
• Other big movers inside the top 50 last year include Cyprus (up 11 to 42nd) and Denmark, Latvia, Oman and Kazakhstan – all of which rose ten places.

The big gainers over the five year period included Saudi Arabia (up 14 places to 44th), the Philippines (up 13 to 47th), Oman (up ten places to 49th) and Thailand (up 12 to 29th).

The report also analyses what the indicators tell governments, firms and investors about the challenges and opportunities facing each nation. In recent years, for example, environmental, social and governance (ESG) considerations have become increasingly important for investors considering a deal, as has the presence of strong national infrastructure.

Dr Appadu said: “As the global economy continues to recover from a series of massive shocks, the nature of both the opportunities and challenges facing different countries face varies widely. This year, the biggest market challenge for nine of the countries in the top ten – including the United States – are socio-economic factors around demographics. 

“By contrast, the nature of the main market opportunities and strengths in the top ten is more diverse: in six – including the USA – it is the strong infrastructure and assets, with two benefitting from strong ESG and two from their political and regulatory environment.”

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METHOD OF RESEARCH

Data/statistical analysis