Gulf buyers pick up Western castoffs from Turkey to South Africa as M&A appetite grows

Two M&A stories at the top of this morning’s column suggest Gulf investors continue to have appetite for assets that Western owners have tired of, betting that emerging market expertise will allow them to debottleneck growth.

UP FIRST- Emirates NBD isn’t done shopping. Just weeks after closing the largest-ever foreign takeover of an Indian bank, taking a 60% stake in RBL, the Dubai-based lender is in early talks to buy HSBC’s Turkey operations, Bloomberg reports

BACKGROUND- Emirates NBD already owns Denizbank, Turkey’s ninth-largest lender with 500-plus branches, while HSBC has been pulling back, with 36 locations now from 315 in 2013.

AND- Adnoc Distribution is in advanced talks to buy Shell’s South African fuel-retail business for about USD 1 bn. The transaction would give it more than 600 locations and c. 10% of the continent’s largest fuel market, South Africa’s Engineering News reports.

Gulf investors are also snapping up port and logistics capacity — and the redundancy to go with it — as part of a build-out that, alongside defense, we think will run for a decade or more. CMA CGM and Oman’s Asyad Group are putting USD 400 mn into a jointly operated multipurpose terminal at Sohar, according to a statement. Meanwhile, AD Ports and Emirates Global Aluminium are investing AED 84 mn to enlarge EGA’s dedicated Khalifa Port berth for larger Newcastlemax vessels, and DP World and Arcapita’s Lintara broke ground on a 20k sqm logistics center in Jebel Ali, making it Lintara’s second Jafza groundbreaking in three weeks.

Look for more of this in key sectors including energy, infrastructure, food security plays, and financial services.

Gulf sovereign wealth funds have joined their global peers in rotating out of public markets. The world’s biggest sovereign wealth funds are pulling money out of listed equities and into private markets, and Gulf funds lead the pack, according to Invesco’s annual sovereign wealth study (pdf), covering 90 funds with combined AUM of USD 17.2 tn.

Mubadala already holds 59% of its assets in private equity, infrastructure, and real estate, while Singapore’s Temasek sits at 49% unlisted, and the shift is accelerating: 17% of SWFs plan to cut listed-equity exposure this year and 28-35% want more exposure to private equity, private credit, and infrastructure.

Why it matters: Index concentration and the AI build-out are the two forces at play here. The top 10 stocks in the S&P 500 now make up 38% of the index — double their weight a decade ago — so a passive allocation has concentrated risk in a handful of US megacaps. Meanwhile, the capital the world needs for the buildout of data centers and the power to run them is mostly outside listed markets.

IN CONTEXT- Total commitments to 2026 data-center investments has more than doubled this year to USD 151.5 bn, with regional players including Adia, Mubadala, and Humain knee deep in it all.

Adia is backing what could be Hong Kong’s biggest IPO of the year: The Abu Dhabi SWF is joining Temasek, GIC, Hillhouse, Tencent, and Millennium to cornerstone up to USD 1.5 bn of Luxshare Precision Industry’s Hong Kong IPO. The Shenzhen-based electronics components maker (it makes Apple’s AirPods, among other things) is looking to raise HKD 24.3 bn (USD 3.1 bn), it said in its prospectus (pdf).

Egypt’s privatization pipeline gets a second flagship float: Misr Insurance Holding’s shareholders approved a 20% EGX float of subsidiary Misr Life Insurance, joining Hussein Abaza’s Banque du Caire in the pipeline. The numbers underneath are strong: consolidated net income and retained earnings rose 32% y-o-y to EGP 37 bn (USD 750 mn) in FY 2025, and total assets grew 13% to EGP 247 bn (USD 5 bn). The Sovereign Fund of Egypt has tapped EFG Hermes as sole global coordinator.

Investors still have plenty of appetite for Gulf banks, looking past the disruption of the last four months (and the medium-term headwinds that are likely to follow). Our friends at Mashreq are back in the debt markets with a benchmark-sized, USD-denominated additional tier-one (AT-1) note. Meanwhile, the UAE’s Rakbank has mandated 11 banks (including Mashreq) for investor meetings ahead of a five-year USD benchmark bond under its EMTN program. And AlJazira in Saudi closed a fresh USD 500 mn AT1. They follow recent trips to market by FAB, Emirates NBD, and Dubai Islamic Bank, among others.

From The Planet of the Asset Managers: State Street has landed a fund management license from Saudi Arabia’s CMA, clearing the US custody giant to run funds from inside the Kingdom rather than merely hold assets there. It already sits on USD 127 bn in Saudi assets under custody and manages another USD 60 bn locally

MEANWHILE- Arab Bank Switzerland is the latest of more than two dozen firms to have entered, expanded in, or won new licenses from ADGM or DIFC since the war began. ABS Middle East will will open in DIFC and plant its nearly USD 25 bn in AUM in the city

Sovereign-AI startup 1001 raised USD 30 mn in a Series A led by US venture firm Lux Capital, eight months after a USD 9 mn seed, per a statement. PIF-backed Sanabil joined alongside Hanabi and others, with the funds earmarked for engineering and GCC expansion. 1001 builds AI for energy, industrials, aviation, ports, and logistics.

MEANWHILE- BasharSoft, the company behind recruitment platform Wuzzuf, is leading a USD 400k seed round (pdf) for Brainsmingle, an AI professional-networking platform, its first deal since buying consultancy iCareer last year.

ALSO WORTH KNOWING THIS MORNING-

Momentum, the UAE entertainment group, and US sports-and-gaming platform Fanatics have formed a JV to build a regulated commercial gaming business in the Emirates, pairing Momentum’s existing lottery, iGaming, and sportsbook licenses with Fanatics’ scale, according to a press release.

XRG, Adnoc’s international investment arm, and Italy’s Eni have each taken a 32% stake in three YPF-operated gas blocks in Argentina, the upstream leg of a USD 12.5 bn integrated LNG project, according to a press release (pdf).

OSN Streaming has made a preliminary, non-binding bid to take Abu Dhabi-based Anghami private at USD 3.39 a share.

JLL has closed the purchase of a stake in FMTECH, PIF’s facilities-management platform, for an undisclosed sum. It has also named 20-year JLL veteran Mike Thompson as CEO.

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