Mergers and acquisitions (M&A) in the Middle East and North Africa (MENA) have reached their highest levels in five years, signalling a wave of corporate consolidation sweeping the region. In the first half of 2025, MENA saw 425 deals close, collectively worth USD 58.7 billion, according to an EY-Parthenon report. This represents a 31% jump in deal volume and a 19% increase in value compared to H1 2024.
Such growth far outpaces global M&A trends and reflects strong dealmaker confidence in the region’s economic prospects. Notably, cross-border transactions have surged, accounting for more than half of all deals and nearly four-fifths of total M&A value—the highest share in half a decade.
The increase has been driven by various factors, including post-pandemic economic recovery, pro-business reforms, abundant liquidity, and strategic diversification initiatives from regional governments.
UAE And Saudi Lead Deal Boom
The Gulf economies are at the forefront of this M&A boom. The UAE alone attracted about US$25.4 billion in M&A inflows in H1 2025, roughly 43% of the MENA total. Mega-deals in Abu Dhabi (often backed by its sovereign wealth funds) have cemented the UAE as the region’s M&A hub. “The United Arab Emirates remains a magnet for global capital,” observes EY’s MENA strategy lead, citing its stable regulatory environment and focus on economic diversification.
By comparison, Saudi Arabia saw approximately USD 2.5 billion in deals (around 4% of the regional total). It’s a smaller share, yet still significant, given many Saudi transactions are strategic domestic moves aligned with “Vision 2030.” Together, the UAE and KSA accounted for the bulk of high-value deals, with a combined USD 27.9 billion in M&A between them.
This leadership is indicative of their large economies and active investment vehicles. It’s also telling that these two countries are driving not just local mergers, but also outbound acquisitions abroad; in fact, the UAE and Saudi Arabia accounted for 87% of MENA’s outbound M&A value, investing in assets from North America to Asia.
Such deal flow underscores these nations’ strategies to acquire advanced technologies, expand into new markets, and consolidate industries to create regional champions. The UAE, for example, has encouraged acquisitions in fintech, healthcare, and logistics as part of its vision to become a diversified knowledge economy.
Saudi Arabia’s deals often dovetail with its national strategy, focusing on sectors like petrochemicals, mining, and telecom to accelerate domestic industrialisation and service upgrades.
Which Sectors Are Driving Regional Consolidation?
Several key sectors have emerged as hotspots for M&A, reflecting where investors see the greatest growth and consolidation opportunities. Chemicals and petrochemicals stand out in particular, as they contributed an estimated 67% of cross-border deal value in H1 2025. A single landmark deal exemplified this trend.
Abu Dhabi’s ADNOC and Austria’s OMV (through their joint venture Borealis AG) acquired a 64% stake in Borouge plc (a petrochemical company) for USD 16.5 billion, one of the largest transactions of the period. This move not only consolidates ADNOC’s position in downstream chemicals but also signals confidence in the long-term demand for petrochemical products, even as the region diversifies away from crude oil.
Technology and tech-enabled sectors are another major draw. Tech deals have surged from e-commerce platforms to data centres and AI firms, as MENA countries push to become regional tech hubs.
Cross-border tech investments, such as the UAE’s G42 acquiring a 40% stake in Khazna Data Centres for USD 2.2 billion (the largest domestic deal), are highlighting how digital infrastructure is being scaled up via M&A. Tech companies offer not just growth but also innovation spillovers, so both strategic buyers and private equity funds are eager to snap them up.
The real estate and infrastructure sector is also seeing significant action. Real estate investment trusts (REITs), construction firms, and logistics park operators are merging to gain scale amid a property boom in Gulf cities. For instance, developers have been consolidating to take on mega-projects like new smart cities and tourism resorts.
The MENA real estate market’s strong rebound (fuelled by population growth and tourism) has made property assets attractive to cross-border investors as well. Additionally, industrial and manufacturing companies are targets for regional roll-ups, as nations aim for self-sufficiency in various supply chains. Overall, deals in chemicals, tech, real estate, and industrials dominated the landscape, aligning with areas prioritised for growth by regional economic visions.
One defining feature of this M&A surge is the outsized role of sovereign wealth funds (SWFs) and state-linked investors. Government-related entities contributed roughly USD 21 billion of deal value across 54 transactions in the first half of 2025, approximately a third of total M&A value.
Heavyweight SWFs, such as Abu Dhabi’s ADIA and Mubadala, and Saudi Arabia’s Public Investment Fund (PIF), have been actively targeting strategic sectors like chemicals, technology, and industrials in line with long-term national diversification goals. These state-backed funds bring deep pockets and patience, often pursuing acquisitions that complement their countries’ economic transformation plans rather than just short-term profits.
For example, ADIA has been buying stakes in global tech and infrastructure assets to bring know-how and stable returns to the UAE. Mubadala has taken positions in semiconductor and life-science companies abroad, which can foster local tech ecosystems. Meanwhile, Saudi Arabia’s PIF has taken majority stakes in domestic entities (such as merging state-owned firms or investing in mining companies) to streamline and strengthen key industries at home.
It has also ventured outward through PIF’s high-profile purchase of English football club Newcastle United and investments in electric vehicle makers, illustrating its ambition to project Saudi influence and diversify income. The flurry of SWF-led deals not only boosts headline M&A figures but also reassures markets, as these funds provide a backstop of confidence and liquidity. Their involvement often catalyses additional private investment alongside.
Private equity (PE) and international investors are also joining the fray, drawn by the region’s growth prospects and reform-driven improvements in the business climate. Global PE firms have raised dedicated MENA funds, seeing an opportunity in mid-sized companies, while local PE players are consolidating fragmented sectors (e.g., healthcare clinics, education providers). The interplay of sovereign capital and private capital is shaping a more dynamic M&A environment than MENA has ever seen.
Signals Of Investor Confidence And Outlook
The M&A boom sends a clear signal of investor confidence in MENA’s economic trajectory. Despite pockets of geopolitical uncertainty, dealmakers are essentially voting with their wallets, indicating optimism about the region’s long-term fundamentals.
Stable or rising oil prices have given Gulf states fiscal headroom to invest, while sweeping pro-business reforms (from new bankruptcy laws to 100% foreign ownership allowances in certain sectors) have reduced barriers to deals.
Moreover, national strategies like Saudi Arabia’s Vision 2030 and the UAE’s Operation 300 billion (an industrial development plan) create a supportive narrative for investment. They show that governments are committed to growth beyond oil, which in turn encourages investors to participate in that growth through acquisitions.
Analysts note that cross-border dealmaking at record levels is a particularly healthy sign. It means MENA companies are confident enough to expand overseas and, conversely, foreign investors see enough opportunity to enter or increase their presence in the region. Such activity fosters greater integration of MENA into global value chains.
The high cross-border volume (233 deals worth USD 45.9 billion in H1) reflects firms seeking new markets and technologies, and a willingness by regional players to form partnerships beyond their home turf. For example, Gulf petrochemical giants buying assets in Asia or Europe indicates a bid to become global leaders in their industry. Likewise, Western multinationals acquiring stakes in Middle Eastern tech or energy firms suggest they view the region as pivotal for future growth.
Looking ahead, industry experts predict that the M&A momentum will continue, albeit possibly at a moderated pace. Investor sentiment remains positive going into late 2025, bolstered by solid economic growth in the Gulf and ambitious privatisation pipelines (e.g., Egypt’s plan to sell stakes in state enterprises has drawn Gulf investor interest).
We may see intensifying competition for high-quality assets, especially those aligning with national transformation agendas (such as renewable energy companies or fintech innovators). This could drive valuations up.
At the same time, any global economic headwinds or tightening financial conditions could test the resilience of this deal wave. For now, MENA’s five-year M&A high stands as a milestone. It highlights a maturing regional marketplace where consolidation is creating stronger homegrown firms, and where investor confidence is at its highest in years.