RIYADH: Merger and acquisition activity across the Middle East and North Africa climbed to $106.1 billion in 2025, a 15 percent increase from the previous year, as dealmaking accelerated despite global economic uncertainty.
In its latest report, professional services firm EY said the number of deals in 2025 rose to 884, marking a 26 percent year-on-year increase.
The Gulf Cooperation Council accounted for the majority of transactions, with 685 deals valued at $102.1 billion.
The sharp uptick signals robust investor appetite despite macroeconomic uncertainty, as GCC countries continue to pursue economic diversification and reduce dependence on crude revenues.
Brad Watson, EY-Parthenon MENA Leader, said: “The MENA M&A market remained resilient in 2025, with deal volume as well as value rising significantly. Cross-border transactions were the main driver of this upward curve, highlighting the increasing appetite of companies for international expansion and diversification.”
He added: “Governments continued to invest steadily, supported by robust economic growth, low public debt, SWF (sovereign wealth fund) backing and broader economic diversification initiatives. Rising foreign direct investment added further momentum.”
According to the report, the expansion in regional M&A activity was largely fueled by enabling regulations, ongoing diversification initiatives, and disciplined deal-making.
Cross-border transactions dominated the market, accounting for 54 percent of total deal volume and 61 percent of value.
Largest deals
EY said sovereign wealth funds in the region, including Saudi Arabia’s Public Investment Fund, Abu Dhabi Investment Authority, and the UAE’s Mubadala, remained primary catalysts of M&A activity.
The region’s three largest deals of 2025 were concentrated in the UAE, led by the acquisition of a 64 percent stake in Borouge by Austrian oil giant OMV and its subsidiary Borealis for $16.5 billion.
This was followed by the acquisition of an 84.76 percent stake in Modon Holding by L’IMAD Holding Co., owned by the Abu Dhabi government, for $13.8 billion.
The third-largest deal was the acquisition of a 42.2 percent stake in 2PointZero by Multiply Group, an Abu Dhabi-based investment holding company, for $7.7 billion.
Cross-border deals
Inbound deal volume increased 37 percent year on year to 223 transactions, while deal value surged to $25.4 billion, more than double the previous year’s $11.4 billion, reflecting sustained confidence in the region’s evolving economic landscape.
Austria emerged as the top investor country, accounting for 65 percent of total inbound deal value, driven by three major chemical-sector transactions.
Outbound deals grew 29 percent year on year to 256 transactions, reaching a combined value of $39.2 billion, representing 37 percent of total activity.
Government-related entities remained major contributors to MENA dealmaking in 2025, accounting for 64 percent of overall outbound deal value.
Canada attracted the highest outbound deal value from MENA investors at $7.1 billion, while the US retained its position as the preferred target destination by deal volume.
North America, Europe, and Asia together accounted for 44 percent and 39 percent of cross-border deals by volume and value, respectively.
Technology and diversified industrial products were the leading contributors to overall deal volume, representing 38 percent.
The banking and capital markets sector accounted for 14 percent of MENA’s total outbound deal value in 2025.
“The region’s banks and financial institutions are actively investing in Indian banks and non-banking financial companies, supported by India’s strong economic growth, expanding credit demand, resilient financial system and its rapidly growing base of digital users,” added EY.
Notable transactions in the banking sector include Emirates NBD’s $4.4 billion deal with RBL Bank, IHC’s $1.1 billion investment in Sammaan Capital, and ADIA’s investment in IDFC FIRST Bank.
Domestic deal activity
Domestic transactions accounted for 46 percent of total deal volume, reaching 405 in 2025 compared with 339 deals in 2024.
The combined disclosed value of domestic deals rose to $41.6 billion in 2025 from $24.4 billion the previous year.
Domestic M&A activity was led by the technology and consumer products sectors, which together contributed 38 percent of total domestic deal volume.
By value, the real estate — including hospitality and leisure — and asset management sectors accounted for a combined 55 percent, reflecting diversified investment across key domestic industries.
“The significant increase in M&A market activity was inspite of regional political unrest, significant global trade policy uncertainties and a once-in-a-generation tech transformation led by AI,” said Anil Menon, MENA Head of M&A and Equity Capital Markets Leader.
He added: “These are times of significant shift in fundamental value of assets and we expect M&A to be deployed surgically by corporates and SWFs to drive enduring competitive advantage.”
