UK remains key M&A hub, but falls in global rankings

Despite remaining a key global hub for M&A activity, the UK has fallen in a new ranking of the world’s most attractive markets for dealmaking, with ongoing political instability and heightened geopolitical risks cited as the main contributing factors.

The M&A Attractiveness Index Scores (MAAIS) report from the M&A Research Centre at Bayes Business School ranks countries on their ability to attract and sustain domestic and inbound dealmaking during the preceding year.

According to the latest edition of the MAAIS report, ranking attractiveness during 2025, the UK placed sixth globally for M&A attractiveness, down one place from the previous year’s list.

The drop meant the UK remained the second most attractive M&A market in Europe, behind Germany for a second consecutive year. The United States and Singapore were again ranked as the most attractive M&A markets globally, with Canada, Germany and Australia rounding out the top five.

The MAAIS report ranks global M&A markets based on 19 indicators collected into six key groups: Regulatory and political frameworks; Economic and financial conditions; Technological capability; Socio-economic characteristics; Infrastructure and asset base; and ESG performance.

As recently as the MAAIS report for 2023, published in 2024, the UK was ranked as the most attractive M&A market in Europe and third globally, behind only the USA and Singapore.

Discussing the UK’s fall, the report’s author Dr Naaguesh Appadu, Senior Research Fellow at Bayes Business School 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 UK was one of a number of major European economies to fall in the rankings, with Germany, France and Switzerland also dropping. The report attributed these slips to “a combination of weaker macroeconomic conditions, heightened geopolitical risk and reduced cross-border deal activity.”

For the UK specifically, the decline will have been primarily driven by a sharp drop in domestic dealmaking during 2025. The UK recorded approximately £270 billion in total M&A deal value last year, a 20 per cent increase from 2024, but this was driven by a 74 per cent surge in foreign takeovers.

In contrast, domestic dealmaking fell by 54 per cent to a total value of approximately £32.7 billion, the lowest level since 2016, amid heightened investor uncertainty, geopolitical turmoil and macroeconomic anxiety, particularly regarding US trade tariffs.

While some of the major European markets struggled last year, others proved more resilient. Spain rose seven places to climb into the top 10 (displacing France), while the Netherlands, Sweden, Belgium, Norway, the Czech Republic and Denmark retained their spots in the top 20.

The report highlighted how many of these countries benefited from “stable regulatory frameworks, relatively strong ESG performance and sustained investment in infrastructure and technology.”

The Nordic countries were particularly noted for their strong governance standards and ESG credentials, while the Netherlands and Belgium were said to have performed strongly thanks to “well-developed financial markets and continued openness to international capital”.

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.”

The continued dominance of the US in the rankings, meanwhile, was attributed to the depth of the country’s capital markets, high domestic deal volume and the scale and quality of its infrastructure and assets. According to Dr Appadu, the combination of these factors means that the US continues to see sustained M&A activity, even in the face of mounting global uncertainty.

However, other major hubs proved less resilient to such headwinds, with China dropping 11 places and India falling by five.

Dr Appadu commented: “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.”

While noting that the impact of the ongoing US-Isreal-Iran war is not reflected in the report, Dr Appadu stated that this is expected to disrupt dealmaking in the short term.

“Even in a more deregulated environment,” he continued, “ESG and institutional quality remain key drivers of investor confidence, particularly as geopolitical shocks increasingly expose underlying vulnerabilities in global markets.”

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