Singapore beats UK, HK in merging & acquisition index

But guess which country is billed as most attractive M&A market.

According to Ernst & Young's 2012 M&A Maturity Index, Singapore is the world’s second most attractive market in which to do M&A, according to new global country rankings. The US continues to be the top ranked country globally in terms of M&A maturity. The UK follows in third position ahead of Hong Kong in fourth.

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The annual Index, published by the M&A Research Center at Cass Business School in collaboration with Ernst & Young, ranks 148 countries on their ability to attract both domestic and cross border M&A deals. The rankings are based on an analysis of a country’s regulatory, political, economic and financial environments, along with its technological capability, socio-economic characteristics, infrastructure and assets.

The high ranking of Singapore demonstrates the increased maturity of Asia as a global hub for transactions. According to the rankings, Asian countries now make up half of the top ten M&A locations for M&A with Singapore and Hong Kong joined by South Korea (5), China (9) and Japan (10).

Across the Index, a country’s technological developments and socio-economic characteristics were found to be the most important factors driving M&A volume, ahead of its economic and financial characteristics.

With close to 40% of deals completed since 2009 taking place outside established US and European markets, the rankings also offer an intriguing glimpse into future M&A hotspots. Among the rising stars is the UAE, which has leapt six places to 20th in the past five years, albeit falling by one position since the last update of the Index in 2011.

Malaysia’s jump of seven places to 18th in the rankings over five years has been driven by significant improvements to its regulatory and political environments. Other high-climbers over the five past years include Poland (up 5 places to 30), Romania (up 13 to 36), Turkey (up 7 to 37), India (up 5 to 38), Kazakhstan (up 6 to 40), and Morocco (up 8 to 47). 

Alexis Karklins-Marchay, Emerging Markets Center Leader at Ernst & Young says: “The lofty rankings of Singapore and Hong Kong are driven mainly by their highly-developed infrastructure, the availability of significant assets for purchase and the business-friendly regulatory environment. This differs to most of the other top 10 countries, which mainly owe their performance to strong levels of technological maturity, including high-tech exports and innovation in terms of patents filed, which demonstrates a highly skilled business community that can attract investment interest.”