Who’s up? Who’s down? Ranking M&A markets

By Dr Naaguesh Appadu, Research fellow at Bayes Business School, City St George’s University of London

The sale of a well-known British company to a foreign buyer often prompts the commentariat to lament that ‘the UK is up for sale’.

However, it can also be a sign that the country is attracting inward investment – a key ingredient in the growth that those same commentators (and politicians) are constantly hankering after. That thinking has shaped the Mergers & Acquisitions Attractiveness Index Scores (MAAIS), published by the Mergers & Acquisitions Research Centre at Bayes for the last 15 years.

The research centre itself was the first in the world to be hosted in a leading business school and remains one of just a handful globally.

The index now ranks the appeal to domestic and foreign investors of doing M&A deals in some 148 countries. Much of the ‘score’ for each country is determined by 19 indicators grouped into six broad groups. Those indicators have been tested against historical market information. The six factor groups are:

  • Regulatory and political indicators (e.g. rule of law and regulatory quality)
  • Economic and financial indicators (e.g. GDP size and growth, inflation, stock market capitalisation and access to financing)
  • Technological indicators (e.g. level of high-tech exports and AI preparedness)
  • Socio-economic indicators (demographics)
  • Infrastructure and assets indicators (e.g. rail networks and the number of registered companies)
  • Environment, Social and Governance (ESG).

We published the latest index this month (February).

The United States again occupies top spot in this particular league of nations – with the UK in fifth place, behind Singapore, Germany and Canada. The top ten is completed by Australia, Netherlands, Japan, France and South Korea. For the most part those nations are regular visitors to the top ten – and Singapore has something of a grip on a place in the top three. However, there is some shuffling year-to-year and over a five year period. The UK, for example, has risen two places on last year and risen three places since 2019. South Korea is this year’s surprise casualty in the upper tier – down five places on last year and on 2019.

The biggest movements are generally lower down the rankings.

In 2024, the most upwardly mobile within the top 50 were Brunei (up18 to 50th), Lithuania (up 14 to 37th), Kuwait (up 11 to 48th), Malta (up 10 to 32nd) and the Czech Republic (up 9 to 24th).

And in league tables – as in the markets – if there are losers there must be winners

Few will be surprised, for example that Hong Kong (25th) has dropped ten places since 2019 and Russia (54th) eight places. However, the biggest tumbler in the top 50 is possibly more surprising. Saudi Arabia fell twelve places (to 42nd) over the last five years. That fall reflects growing concern over the kingdom’s ESG ratings.

The USA, Germany, the UK, France and South Korea score particularly well on the ‘infrastructure and assets’ indicators. That reflects the quality and number of their registered companies, ports, roads and rail. Singapore, the Netherlands and Australia gained ground in the ‘regulatory and political’ indicators – perhaps showing the value of ‘strong and stable’ civic leadership and institutions, to coin a phrase.

Canada scored particularly well on the ‘Environmental, Social and Governance’ indicators while Japan’s lofty position owes much to its performance in the ‘Economic and Financial’ indicators.

Notably, the leading ‘market challenges’ denting the appeal of nine of the top ten countries are in the ‘Socio-economic’ category. This largely reflects their ageing populations.

South Korea is the only country in the top 10 where the biggest market challenge is ‘Regulatory and Political’ – which is perhaps understandable given the dramatic attempt by then-president Yoon Suk Yeol to impose martial law in December.

As well as highlighting the movement of individual nations, the index illuminates the patterns of trade and investment more broadly. Most notably perhaps, it shows that 32% of global M&A activity last year took place in ‘non-traditional’ M&A markets (those outside North America, western Europe, Australia, New Zealand and Japan) – unchanged on the previous year. Since surging from 26% in 2006 to 40% in 2010, that figure has fluctuated between 30-40%.

This is worthy of note given these markets have accounted for a rising proportion of global gross domestic product – around 63% of global GDP, according to the IMF's 'World Economic Outlook Database.

Those ‘UK for sale’ signs take on a different sheen set against that particular background.