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Cass M&A research signifies the emergence of Asia

First of its kind M&A index illustrates country's ability to attract and sustain M&A activity

A new study from our Mergers and Acquisitions Research Centre, provides the most accurate available picture of the global M&A market. The MARC M&A Maturity index assesses and ranks the maturity of 175 countries for M&A activity. The report provides a good indication for which regions will be the M&A stars of 2011.

The traditional bases for M&A activity, such as the UK, US and Japan, unsurprisingly top the rankings. However, among the notable successes are countries such as Malaysia, Israel and Chile who all appear in the mid-twenties. These strong results are often linked to particularly distinct features. For example Chile, ranked 26th, has a MARC score of 1.4 (94%) for political factors, a score equal to that of the UK and US.

One of the more counter-intuitive findings from this study is that more M&A deals tend to occur when political instability is high, but only in the transitional markets. However, political environment and technological development have virtually no differentiating effect on M&A at the mature level where socio-cultural factors are critical drivers.

Outside of North America and Western Europe Asia emerges as the most favourable region for M&A activity. South Korea, Singapore and Hong Kong score on par with Australia and Germany, evidence that they have reached the mature stage for M&A activity.

Despite its recent growth and economic might the Cass MARC Index shows that China's M&A market is far from reaching its full potential. A more detailed examination of the data shows that while China scores well on most criteria their scores for political stability and regulation are 3.0 (50%) and 3.3 (40%) respectfully, which explains that while they are classified as a mature market their score positions them in with the highest rankings of transitional market countries.

The study, which is sponsored by Allen & Overy, Credit Suisse and Ernst & Young assesses the risks and opportunities present in territories across the world based on six factors; economic, financial, political, regulatory, socio-cultural and technological. Each category has a number of sub factors, weighted to provide an overall 'MARC Maturity Index' score.

Co-author of the study and Director of MARC, Professor Scott Moeller, said: "The Cass MARC M&A Maturity Index provides a robust illustration of M&A maturity on a country level and can function as practical starting point for discussion around deal-making in lesser known markets. As we update this study annually we'll begin to see patterns emerge and it will be possible to track regional M&A maturity overtime.

"The index shows the cast potential for non-traditional markets for acquisitive companies. It will be exciting to see how the scores change over time."

Ernst & Young have produced an interactive website using the data from this study.

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