MENA closed 271 M&A transactions in 1H 2025

M&A momentum in MENA bucks global trend: The Middle East recorded 271 transactions in 1H 2025, up 19% y-o-y, even as global M&A volumes fell 9%, according to PwC’s latest TransAct Middle East report (pdf).

The region’s performance comes as sovereign capital, regulatory reforms, and diversification agendas give dealmakers room to maneuver, even as oil prices soften and financing costs rise. The IMF has forecast GDP growth of 2.6% for MENA this year, up from 1.8% a year earlier, even as lower oil prices and higher financing costs weigh on exporters. The dealflow reflects those pressures, with buyers gravitating toward mid-sized, policy-driven transactions in digital infrastructure, healthcare, and green industry. In the absence of a global rebound, the region is leaning on domestically anchored M&A to sustain momentum.

The UAE retained its regional lead with 95 transactions in 1H 2025, while Egypt nearly doubled its tally to 86, and Saudi Arabia closed 59 plays. Together, the three markets accounted for 89% of all regional activity in 1H. Cross-border flows increasingly remained within the region, with intra-MENA transactions climbing to 134, which PwC says is a sign of “growing integration and investor confidence across the region.”

Transaction values tell a more cautious story: Nearly all of disclosed M&A came in at under USD 100 mn, while no megadeals of over USD 5 bn were struck for the second year running and only six transactions cleared the USD 100 mn mark. Smaller, faster-to-close agreements have become the preferred play as buyers target assets that can be financed without stretching balance sheets, particularly in volatile rate and oil environments. PwC also says this reflects a deliberate tilt toward targeted acquisitions that add capabilities and align with state priorities, rather than scale-for-scale’s sake.

Large-cap activity was scarce but still notable: Maaden’s USD 964 mn purchase of a 20.6% stake in Aluminium Bahrain stood out in industrials, while Elm’s USD 907 mn takeover of Thiqah reinforced Saudi Arabia’s push in digital services. Egypt saw one of its biggest recent plays with Al Ezz Group’s USD 881 mn acquisition of Ezz Steel, and Saudi’s Smart Accommodation added scale through its USD 666 mn buyout of Al Nakhla Management.

Sovereign wealth funds + corporates remain a decisive force: Gulf funds have funneled more of their firepower back home, with ADQ allocating 85% of its capital domestically in the first half of the year. That capital is underwriting the energy transition, localizing supply chains, and building digital sovereignty. Corporates anchored most of the transaction volume, while private equity funds sustained their role in cross-border transactions.

Sector trends mirrored the broader economic shift, with financial services leading activity with about 70 transactions, compared to 44 in 1H 2024. Egypt’s Qardy became the first local fintech to close a SPAC merger, raising USD 23 mn. Technology and telecoms were dominated by infrastructure rather than consumer apps, with G42’s USD 2.2 bn acquisition of a 40% stake in Khazna Data Center Holdings marking the half’s biggest transaction.

The outlook: Dealmaking is expected to remain concentrated in digital infrastructure, healthcare, and green industry, with sovereign backing and regulatory clarity keeping pipelines steady. Mid-sized, state-aligned plays are set to dominate through year-end, leaving the Middle East as one of the few regions where M&A is still gathering pace.

MARKETS THIS MORNING-

Asia-Pacific markets are broadly in the green this morning, with Japan’s stock markets jumping on the back of the country’s Prime Minister Shigeru Ishiba resigning over the weekend after less than one year in office. The Nikkei is up 1.6%, while the Topix is up 1% to a record high. Elsewhere in the region, South Korea’s Kospi and Hong Kong’s Hang Seng Index are all trading up.

Across the pond, futures suggest that Wall Street will also open in the green later today, while investors will be keeping a close eye on inflation data coming out at the tail-end of the week.

THE CLOSING BELL-

The DFM rose 0.3% on Thursday on turnover of AED 449.4 mn. The index is up 16.2% YTD.

In the green: Takaful Emarat (+2.1%), Amanat Holdings (+1.8%) and Emaar Properties (+1.8%).

In the red: Al Mal Capital REIT (-10.0%), Emirates Integrated Telecommunications Company (-2.9%) and Chimera S&P UAE Shariah ETF – Share class B – Income (-2.3%).

Over on the ADX, the index fell 0.2% on turnover of AED 792.4 mn. Meanwhile, Nasdaq Dubai was up 0.1%.

CORPORATE ACTIONS-

Sharjah Islamic Bank’s board of directors has authorized the sale of 167.7k treasury shares, according to an ADX disclosure (pdf). The sale represents 5.18% of the bank’s total shares.