SINGAPORE is the world's second most attractive market for mergers and acquisition (M&A) deals, according to a new report.
The report, part of an annual ranking carried out by the M&A Research Center at Cass Business School in collaboration with Ernst & Young, put the United States in first spot, Britain, third and Hong Kong, fourth.
It said that Singapore's high ranking demonstrates Asia's growing importance as a transactions centre.
Indeed, Asian economies accounted for half the top 10 spots in the new league table. South Korea is No. 5, while China is at ninth place and Japan is 10th.
"South-east Asia has emerged as an increasingly important global investment destination and Singapore serves as its deal structuring hub," said Mr Luke Pais, a partner at Ernst & Young's transaction advisory services in Singapore.
"In addition, it is also perceived as a favourable location from which Asian companies plan their investments into Western markets as well as other emerging markets such as Africa and South America."
Some of the more prominent deals taking place now underline the point here. Singapore-listed China Merchants Holdings plans to buy the entire equity interest in the owner and operator of the Ningbo Beilun Port Expressway in Zhejiang province for 890 million yuan (S$173 million) while Heineken has offered to buy Fraser & Neave's stake in Asia Pacific Breweries for $5.1 billion.
However, ST Engineering announced yesterday that its planned acquisition of the Tampa aerospace maintenance facility and certain assets of Pemco World Air Services will not go ahead.
Mr Alexis Karklins-Marchay, the emerging markets centre leader at Ernst & Young, said the high rankings of Singapore and Hong Kong were mainly due to their good infrastructure, the availability of significant assets for purchase and business-friendly regulatory environments.
"This differs from most of the other top 10 countries, which mainly owe their performance to strong levels of technological maturity, including high-tech exports and innovation in terms of patents filed, which demonstrates a highly skilled business community that can attract investment interest."
The report ranked 148 countries on their ability to attract domestic and cross border M&A deals, based on an analysis of their regulatory, political, economic and financial environments.
Each market's technological capability, socio-economic characteristics, infrastructure and assets were also taken into account.