MENA M&A activity plunges in 1Q 2026, while global outlook appears rosier

MENA M&A activity fell 74% y-o-y in value terms in 1Q 2026, falling to USD 18.8 bn as the US and Israel’s war on Iran dampened market sentiment, according to LSEG data.

It was inbound M&A in the region that tripped up the most during the quarter, falling 90% y-o-y to a 10-year low of USD 4.6 bn. Meanwhile, outbound M&A also fell, albeit at a much softer pace of 55% y-o-y to USD 11.5 bn. That’s the lowest value of M&A transactions originating from the region in two years.

The big fish of the quarter: The Abu Dhabi Investment Authority’s (Adia) sale of its entire18.4% stake in Pension Ins. Corporation Group, which closed last quarter, topped the charts as the largest M&A transaction with any MENA involvement. The transaction was valued at some USD 4 bn. Other major transactions in the quarter included ePointZero Holding’s USD 2.3 bn acquisition of a 100% stake in US-based energy firm Traverse Midstream Partners, as well as Aluminium Bahrain’s USD 2.2 bn acquisition of France’s Aluminium Dunkerque.

Goldman Sachs took the lead as the financial adviser with the largest value and volume of transactions under its belt in MENA during the quarter, advising on three transactions worth a combined USD 34.8 bn, according to GlobalData. Some of the largest transactions it worked on include PIF’s Savvy Games Group’s USD 6 bn acquisition of Shanghai Moonton, as well as the Alba-Dunkerque takeover.

Even with the downturn, it’s still “too early” to extrapolate what the rest of the year holds, Goldman Sachs’ co-head of MENA Investment Banking Jassim AlSane says. Some analysts are expecting a short-term slowdown in the dealmaking numbers amid heightened uncertainty caused by the regional conflict. Amid the uncertainty, M&A activity will shift towards safe havens that will help hedge against inflation and volatility, AlSane said. “The regional fundamentals remain intact, and if anything, the economies in the GCC have proven their resilience despite the volatility in geopolitics,” he said.

The global outlook is looking promising

A rosier view? Pure M&A volumes are expected to rise to USD 3.8 tn in 2026, surpassing 2021 and 2025 levels, Tim Ingrassia, co-chairman of global M&A in investment banking at GS, said in a recent note. “To get a measure of ‘pure M&A volume,’ Ingrassia omits spinoffs, private company funding rounds, and [transactions] involving special purpose acquisition companies, or SPACs,” the note says.

The “tyranny of terminal value” is helping to drive that global activity: With AI disrupting long-term business models, investors are no longer buying based on the current business environment, but rather based on their predictions of a stock’s worth in the future — anywhere between six to infinity years down the line, Ingrassia says. “Terminal value is one of the biggest contributors to why buyers need to participate in M&A,” he says.

Meanwhile, private equity is facing a structural crisis of stuck capital, as fund distributions are at a 16-year low, according to data from MSCI and Global Banking & Markets. Firms are facing mounting pressure to accelerate the sale of portfolio companies and boost returns to their investors, Ingrassia notes.

MARKETS THIS MORNING-

Asia-Pacific markets are mixed in early trading this morning as investors sit tight, awaiting earnings season and monetary policy decisions from the US, Japan, UK, and Europe. Japan’s Nikkei and the Hang Seng are in the red, while the Kospi and Shanghai Composite are looking at gains.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.4% yesterday on turnover of SAR 6.1 bn. The index is up 6.5% YTD.

In the green: Petro Rabigh (+10.0%), Saudi Kayan Petrochemical (+10.0%), and Yanbu National Petrochemical (+7.7%).

In the red: Abo Moati for Bookstores (-4.1%), Saudi Tadawul Group Holding (-3.7%), and Saudi Paper Manufacturing (-3.5%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.7% yesterday on turnover of SAR 23 mn. The index is down 1.5% YTD.

In the green: National Building and Marketing (+15.6%), Mulkia Investment (+8.6%), and Time Entertainment (+6.5%).

In the red: Naf Company for Feed (-17.7%), Altharwah Albashariyyah (-9.0%), and Saudi Parts Center (-8.1%).