The UAE has moved up six places in just five years to come in 20th in the 2012 M&A Maturity Index. The top three most attractive markets in which to do M&A are currently the US, Singapore and the UK, with Asian countries now making up half of the top ten M&A locations.
The annual index, published by the M&A Research Centre 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 the country’s regulatory, political, economic and financial environments, along with its technological capability, socio-economic characteristics, infrastructure and assets.
The UAE’s ranking has improved in recent years due to positive developments in financial infrastructure and economic growth. Also making it into the index from the Gulf region are Qatar (45), Saudi Arabia (59), Bahrain (62), Kuwait (64) and Oman (66).
The progress of emerging markets has highlighted problems experienced by some developed countries in Europe – most obviously Greece – where economic and political problems are hampering M&A activity.
Phil Gandier, MENA Transaction Advisory Leader, Ernst & Young, said, “As developed economies continue to face challenging economic times, regional and international investors have grown in confidence when it comes to investing in growth markets in the Middle East. The UAE in particular continues to have an attractive investment climate with ongoing developments in areas such as the financial and infrastructure sectors. The Middle East region is home to a significant amount of oil wealth yet diversification away from purely petro-based economies has allowed domestic players to assume a stronger position in growing investment and driving new deals in the region. This trend indicates a healthy level of confidence from investors and in these markets.”
Anna Faelten Deputy Director, M&A Research Centre at Cass Business School, said, “The Middle East is definitely a region of interest for future M&A activity. The UAE has moved up 6 places over the last five years to 20th position because of its established infrastructure for business, and the positioning of Dubai and Abu Dhabi as hubs for regional business is one of the UAE’s strongest attributes. While political stability remains an issue in many Middle Eastern markets, the changes should mean that economies in the region become more open. There is a huge amount of wealth in the region stemming from oil and much has been done with this to improve infrastructure; it’s very easy to get around the region now and that is attracting companies there. In addition to the UAE, Oman, Qatar and Bahrain are all good illustrations of these strengths. However, the region needs to focus on technological development to climb further in the M&A maturity index.”