UK now ranked fifth globally for M&A attractiveness

The United Kingdom has recently made a significant leap in its global ranking of attractiveness for mergers and acquisitions (M&A). Surpassing all other European countries except Germany, the UK now holds the fifth spot on the international index for M&A investors, a rise of two positions from the previous year. The latest report from Bayes Business School’s Mergers and Acquisitions Research Centre highlights this positive development, with the UK scoring 71 percent on the index compared to the leading US score of 78 percent.

This index evaluates countries based on 19 indicators categorized into six groups, including factors like regulatory and political frameworks and infrastructure and assets. The United States maintained its top position from the previous year, followed by Singapore in second place, Germany in third, and Canada in fourth place.

According to Naaguesh Appadu, a senior research fellow at Bayes, the UK’s M&A environment has remained resilient despite challenges such as having three prime ministers in 2022, high inflation, Brexit, the COVID-19 pandemic, and the Russian invasion of Ukraine. The market experienced a shift after Brexit, with record-breaking activity in 2021 due to the pandemic but a cooling off in 2022. Appadu noted that the depreciation of the British pound against other major currencies and the decline in the share prices of UK-based companies have fueled inbound M&A activity.

The report identifies the infrastructure and assets sector as a significant market opportunity for the UK while pointing out socioeconomic issues like aging populations as the biggest challenges for British markets. Looking beyond the UK’s ranking, China has dropped three places to 23rd, and India has fallen out of the top 50, landing in 52nd place. On a positive note, the Netherlands has climbed four spots to seventh place, and France has risen by six positions to ninth place.

In conclusion, the UK’s improved standing on the global M&A attractiveness index underscores the country’s resilience and appeal to investors despite the various challenges it has faced in recent years. The findings of the report shed light on the strengths and opportunities present in the UK’s M&A landscape while also highlighting areas that require attention and mitigation of risks. As the UK continues to navigate a rapidly changing economic landscape, maintaining and enhancing its attractiveness for M&A investments will be crucial for sustained growth and prosperity.