Whereas competition in the manufacturing sector was progressively ensured beginning with the end of the Second World War, services have been progressively opened to international competition only since the late eighties and are still among the most regulated sectors in OECD countries. In this paper, we analyse the impact of deregulation in services on cross-border mergers and acquisitions (M&As) in that sector. We find that deregulation favours inward M&As in services. On the other hand, deregulation has an ambiguous impact on outward M&As that depends on the initial level of regulation in the acquiring country. In particular, we provide some evidence of a U-shaped relationship between deregulation and outward M&As in the service sector.