Middle East M&A Volume Climbs Amid Global Decline

Deal volumes across the Middle East hit 271 in the first half of 2025, up from 228 a year earlier, defying a 9 per cent contraction in global M&A activity. The region owes this strong performance to sovereign capital, regulatory reforms, and strategic investments in high-growth sectors. Middle East M&A Volume Climbs Amid Global Decline now captures the robust upswing.

Driving this growth are the UAE, Saudi Arabia and Egypt, which together accounted for 89 per cent of all regional deals, contributing 240 of the total 271 transactions. Egypt posted the most dramatic year-on-year increase, Saudi Arabia held firm, and the UAE maintained its dominance as a key investment hub. These three markets continue to anchor regional momentum with consistent activity.

Deal dynamics reveal a marked tilt toward mid-market transactions. About 96 per cent of disclosed deals were valued under USD 100 million, and no megadeals—those above USD 5 billion—were recorded for the second consecutive half-year. Investors clearly favour less capital-intensive, faster-closing acquisitions aligned with national economic goals.

Sovereign wealth funds are pivotal in sustaining this resilience. Investors such as Abu Dhabi’s ADQ channelled up to 85 per cent of funds into domestic projects, reinforcing economic diversification and localisation drives. Corporate buyers led 154 deals, while private equity maintained strong representation with 117 deals, underscoring balanced market participation.

Thematic trends highlight technology, energy transition, and healthcare as key catalysts. Landmark transactions include G42’s USD 2.2 billion acquisition of a 40 per cent stake in Khazna Data Centers, and Saudi Arabia’s USD 907 million Elm Co acquisition of Thiqah Business Services—both reflecting long-term strategic priorities.

Intra-regional and domestic deal flow gained traction, with 134 transactions recorded, up from 118 in H1 2024, while outbound cross-border deals continued to wane. This signals increasing investor confidence in local markets and a pivot to regionally self-sufficient economic strategies.

Each country brings distinct strengths: the UAE, with 95 deals, remains the most active hub, thanks to its flexible regulatory environment and sector diversity; Saudi Arabia, with 59 deals, benefits from Vision 2030 reforms and steady non-oil growth; and Egypt, surging to 86 deals, is boosted by IMF support, tax modernisation and renewed investor trust.

Globally, M&A volumes declined by 9 per cent in H1 2025—a stark contrast to the Middle East’s 19 per cent rise. The gulf underscores the region’s adaptive capacity and alignment with broader economic transformation goals.