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China breaks into the world's top 10 most attractive countries for M&A

The country jumped one place to 10th in a Cass M&A Attractiveness Index report

• South Africa, Mozambique and Kenya spearhead charge of African nations up M&A Attractiveness Index
• Colombia, Malaysia, Kazakhstan and the United Arab Emirates strengthen claim as future growth markets

China has broken into the ranks of the world's top 10 most attractive countries for M&A.

The country jumped one place to 10th in the 2013 M&A Attractiveness Index published by Cass Business School, part of City University London.

The annual report, released by Cass's M&A Research Centre, ranks 131 countries on their ability to attract and sustain domestic and inward M&A deals.

The rankings are based on an analysis of a country's regulatory and political environment, economic and financial factors, infrastructure and assets, technological capability and socio-economic characteristics.

Director of Cass's M&A Research Centre, Professor Scott Moeller, said: "It probably comes as no surprise to many that China has risen as an attractive location for doing M&A deals, but this can now be confirmed through the most recent issue of the M&A Attractiveness Score. This rise of China over the past five years has been due principally to a development into a more technology-savvy country, with the country having a very high level of innovation and high-technology exports, matching many of the more developed markets."

The US retained top spot in the rankings, followed by South Korea, Singapore, United Kingdom and Hong Kong. The other top 10 countries are Germany, Canada, France, Netherlands and China.

China's ascent pushed Japan out of the top 10 for the first time as it slumped to 11th. Canada was the only other top 10 country to suffer a fall as it sank two places to 7th.

Hong Kong continued its rise in the rankings, leaping two places to 5th. With South Korea and Singapore maintaining their grip on 2nd and 3rd, Asian countries now make up four of the top 10 most attractive destinations for M&A deals.

One of the fastest risers in the top 50 country list in 2013 was South Africa which has moved up four places to 42nd. In addition, Kenya and Mozambique also moved up in the rankings, indicating Africa could be a bright prospect for M&A in 2014.

Professor Moeller said: "South Africa's rise is due to a significant improvement in several key regulatory factors."

Colombia, Malaysia, Kazakhstan and the United Arab Emirates strengthened their claim as future growth markets by holding onto large gains from previous years.

Malaysia has been among the biggest climbers, moving nine places to 15th position over the last five years. The United Arab Emirates has moved up eight places to 19th in the same period.
Kazakhstan has also been propelled nine places over five years, remaining unmoved at 39 in this year's ranking. The highest climber over five years is Colombia, which has shot up 15 spots to 50th despite a fall one place in this year's table.

European countries continued to suffer from the legacy of the financial crisis with Cyprus, Iceland and Ireland each falling a place. They have conceded seven, 16 and eight spots respectively over the last five years.

The report also finds M&A activity in emerging markets has retracted from its 2010 peak of 40 per cent to 37 per cent of the volume of transactions announced worldwide so far in 2013.

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