The geography of value
Cross-border M&A may be global in ambition, but its execution is local, and performance varies significantly by jurisdiction.
Unsurprisingly, the US has been the most active jurisdiction by both inbound deal volume and deal value in recent years. The relative strength of the dollar through much of this period, together with high valuations of US-listed companies compared to elsewhere, has made them busy acquirers too.
The UK comes in second for deal volume and deal value followed by Germany for deal value, while MENA tops the charts for post-deal acquirer performance. Other markets including the Nordics are punching above their weight.
Top three markets by deal volume (inbound foreign investment)
US
UK
Nordics
Top three markets by average deal value
US
UK
Germany
Top three markets by change in acquirer’s share price post-deal
MENA
Nordics
US
A dominant US
The US dominates global cross-border M&A, representing a third of all deals valued at over US$100m since 2018, and boasting the highest average deal value at US$1.19 billion. Almost three quarters of US cross-border M&A was valued at over US$250m.
Dealmakers also view the US as the market most conducive to successful deal outcomes – 80% think this jurisdiction adds the most value for acquirers, largely due to the size of its capital markets.
We have definitely seen a number of European mid-market private equity players increasing their on-the-ground presence in the US over several years to assist European portfolio companies in a more organic way. Conversely, what we haven’t seen is the reverse of US mid-market funds looking to establish in Europe in the same way.
Paul Tomasic, Managing Director and Head of European Healthcare, Houlihan Lokey
We have seen more inbound M&A activity into Europe than outbound to the US – and that is due, in part, to misaligned valuation expectations. US markets tend to be higher valued and US investors, if they’re interested, have shown willingness to pay higher multiples for premium assets. By comparison, German companies – with some exceptions – often see it as challenging to become comfortable with the high valuations typically paid in the US.
Carsten Burger, Managing Director, DC Advisory
Indeed, the M&A outlook for the US looks robust, despite current geopolitical challenges. An overwhelming 98% of global dealmakers are net positive about M&A in the US over the next 12 months, with 48% describing themselves as very positive.
Our survey captured responses shared both before and after President Trump’s ‘Liberation Day’ and this optimism appears to have survived at least the initial impact of those tariff announcements. Subsequent impacts on the dollar and bond markets are, of course, unsettling dealmakers and the IMF’s latest round of global economic forecasts have been particularly hard on the US, which has seen growth downgraded from 2.7% to 1.8%.
A weakened dollar will certainly reduce firepower for global M&A. However, there is an argument that it could also make the profit streams of international targets in regions such as Europe more compelling.
of global dealmakers believe the US will dominate cross-border M&A until 2030.
The UK: a resilient force in M&A
The UK is second only to the US in terms of its place on the global M&A stage, despite its overall economy being smaller than several other countries. This is, in part, thanks to a supportive, robust and clear regulatory regime.
While regulation is often cited as a barrier to cross-border M&A, our data reveals a more nuanced picture. In fact, the majority of dealmakers across all seven countries analysed said the UK’s regulatory environment actually increases both the frequency and success rate of cross-border deals – a finding that sets it apart from other jurisdictions.
of global dealmakers think the UK creates high value for acquirers after M&A transactions.
of global dealmakers believe regulation is a primary factor in the UK’s M&A success.
Meanwhile, despite a turbulent few years encompassing a stock market crash in 2022, uncertainty around the 2024 General Election and depressed growth figures, according to the survey respondents, the UK’s M&A outlook is positive. More than half (57%) of global dealmakers are very positive about UK M&A activity over the next 12 months – the highest of all the jurisdictions included in our survey.
Interestingly, French respondents are the most enthusiastic about the UK’s prospects. Nonetheless, Brexit continues to shape the UK’s position in cross-border M&A – 55% of global respondents, including 57% of German and 52% of French dealmakers, see European regulation as a significant barrier to deeper deal activity between the UK and the EU. This may be because, while the UK’s domestic regulatory regime is viewed positively, post-Brexit divergence from EU rules has introduced added complexity for cross-border transactions.
Germany: fighting back?
German economic growth has lagged much of the rest of Europe in recent years, hit by an overreliance on exports, high energy costs and low public investment. In April, several German economic institutes cut forecasts for 2025 to 0.1% from the 0.8% predicted last September. These forecasts do not yet take into account the latest threat of tariffs from the US.
Unsurprisingly, therefore, optimism surrounding Germany is more muted. But three-quarters (75%) of global respondents said they still feel positive about Germany’s outlook. While notably lower than the figures for the US and the UK, this positivity increases to 90% for domestic dealmakers.
There are certainly challenges relating to dealmaking in Germany that global dealmakers would like to see addressed:
Digital infrastructure, cyber security, defence, AI and robotics – these are the key trend areas we’re seeing in the German market. They’re being driven by Europe’s growing need for technological independence, secure communication and resilience in the face of geopolitical instability.
Dr Peter Hellich, Partner, Taylor Wessing
of dealmakers want to see more favourable local laws in Germany.
want to see changes to Germany’s bureaucracy.
The data confirms the perception that more favourable local laws would make Germany even more attractive to incoming investors. The new government is planning improvements in that respect, particularly regarding the overall tax burden for companies.
Dr Christian Traichel, Co-Head of International Corporate, Taylor Wessing