U.S. retains M&A beauty pageant crown

The United States and Singapore remained the world’s most attractive markets for mergers and acquisitions last year, according to the latest annual global league table of 148 countries.

Canada, Germany and Australia complete the top five. The UK is one of several major European economies to fall down the table, slipping one place to 6th. It is followed by the Netherlands, South Korea, New Zealand and Spain, - with the latter the big mover at the top, rising seven places to displace France in the top ten.

The M&A Attractiveness Index Scores (MAAIS) report, which is published by Bayes Business School’s M&A Research Centre, ranks countries on their ability to attract and sustain domestic and inbound M&A activity. The rankings are based on 19 indicators brought together in six groups:

• Regulatory and political frameworks
• Economic and financial conditions
• Technological capability
• Socio-economic characteristics
• Infrastructure and asset base
• ESG performance.

The report author, Dr Naaguesh Appadu, Senior Research Fellow at Bayes Business School (part of City St George’s, University of London), said: “While the UK remains a key M&A hub and its structural strengths continue to support long-term deal activity, enduring political instability is putting off some investors. Combined with elevated geopolitical risk, this has tempered investor confidence and we can see that in less domestic M&A activity.”

The continued U.S. dominance reflects the depth of its capital markets, the scale and quality of its infrastructure and assets, and a high volume of domestic deal activity. Together, Dr Appadu says, these strengths support sustained M&A execution – even amid global uncertainty.

The US sense of exceptionalism continues to have some grounding in reality. While geopolitical risk remains elevated, key indicators such as regulatory quality, institutional strength and market depth have remained broadly stable, continuing to support investor confidence and deal activity.

However, the two Asian regional superpowers who have driven much global growth in recent years slipped down the rankings: China by 11 places and India by five.

Dr Appadu said: “The drop in China’s ranking highlights the growing impact of geopolitical risk on M&A activity. Ongoing tensions with key global partners, alongside tighter regulatory oversight and slower GDP growth, have reduced the predictability of the investment environment and dampened inbound deal appetite.

“In India, execution challenges and regulatory frictions remain key constraints. As global uncertainty rises, investors are increasingly favouring markets that combine growth with institutional stability and deal certainty.”

He also noted the likely enduring impact of the latest Middle East conflict.

“Although the impact of the US-Israel-Iran war may not be visible in the report, we expect it to disrupt M&A trends in the short term. Even in a more deregulated environment, ESG and institutional quality remain key drivers of investor confidence, particularly as geopolitical shocks increasingly expose underlying vulnerabilities in global markets.”

Nine of the top ten countries performed weakest on indicators around socio-economic issues, largely due to ageing populations and other demographic challenges.

Europe

Several European economies slipped down the rankings over the past year, reflecting a combination of weaker macroeconomic conditions, heightened geopolitical risk and reduced cross-border deal activity. Those to decline include Germany, the UK, France and Switzerland – largely due to deteriorating economic and financial indicators, alongside increased policy uncertainty. This was reflected in reduced inbound M&A activity.

Slowing economic growth, pressure on industrial output and tighter financing conditions dampened activity. Switzerland, while remaining strong on institutional quality and infrastructure, was affected by weaker relative performance in economic and financial factors compared with peers.

By contrast, several European countries demonstrated resilience despite the challenging backdrop. Spain, for example, rose seven places into the top ten – at the expense of France.

The Netherlands, Sweden, Belgium, Norway, the Czech Republic and Denmark all retained positions within the top 20, supported by stable regulatory frameworks, relatively strong ESG performance and sustained investment in infrastructure and technology.

Nordic countries particularly benefited from strong governance standards and ESG credentials, which have become increasingly relevant for cross-border investors – even while they are under attack across the Atlantic. The Netherlands and Belgium maintained their positions due to well-developed financial markets and continued openness to international capital, while Spain and the Czech Republic were supported by improving economic fundamentals and competitive cost structures that helped sustain inbound interest.

Dr Appadu said: “Overall, the divergence within Europe highlights the growing importance of policy stability, ESG performance and economic resilience in potential M&A deals, particularly in an environment characterised by persistent geopolitical and macroeconomic uncertainty.”

Asia rising – despite China and India slipping down the table

Singapore’s hold on second place underscores Asia’s growing importance as a centre for global corporate finance. Its position is driven by a predictable regulatory regime, political stability and well-developed financial and physical infrastructure. The country continues to attract both regional and cross-border transactions.

Dr Appadu said: “It is notable that Asian economies now account for five of the world’s top 20 M&A destinations, with Singapore and South Korea (8th) joined by Japan (13th), Hong Kong (19th) and Malaysia (20th).”

South Korea’s ranking reflects a combination of strong economic and financial conditions and advanced technological capabilities. Japan’s position is supported by the scale and quality of its infrastructure and industrial assets, while Hong Kong and Malaysia benefit from relatively high levels of technological development, including strong performance in high-tech exports and innovation activity. The latter is evidenced by a high number of patents filed.

Innovation in those countries reflects a highly skilled business community that can attract investment interest – even in turbulent times.

The rankings also reveal the emergence of new regional hubs and potential M&A hotspots. Nearly 40 per cent of the global M&A deals completed since 2009 took place outside the US and Europe.

However, it remains to be seen what impact the US-Israel conflict with Iran has on the Gulf countries who are prominent in this arriviste class.

Qatar was among the strongest performers, rising five places over the past year to 32^nd. It has risen eight positions since 2020. The improvement reflects sustained economic expansion, increased investment in financial infrastructure and a gradual strengthening of capital market institutions, all of which have contributed to improved conditions for both domestic and inbound deal activity.

However, Qatar continues to score relatively poorly on socio-economic factors, including labour market depth and broader human-capital indicators. While these weaknesses have not prevented recent improvements in their appeal to M&A market players, they may constrain the pace of future gains unless accompanied by further structural reforms.

Pic above: Women judge a male beauty pageant in Los Angeles in 1928.