MENA M&A activity picks up y-o-y in 1H despite 2Q slowdown -EY

M&A momentum carried through to 1H 2025 as the MENA region sealed 425 transactions worth USD 58.7 bn in the first half of the year, marking a 31% y-o-y jump in volume and a 19% y-o-y rise in value, according to EY’s latest MENA M&A Insights report.

Activity cooled in 2Q on trade-policy uncertainty and regional tensions, but sentiment stayed upbeat as diversification drives and growth sectors kept transactions moving. This built on last year’s steady flow and early-2025 momentum, supported by regulatory reforms and a firmer macro backdrop.

The UAE led the charge in 1H, pulling in USD 25.4 bn across sectors including chemicals, technology, industrials, and real estate. Meanwhile, Saudi Arabia booked USD 2.5 bn in 1H transactions, with sovereign-backed players driving outbound activity.

Among the largest of transactions were Borealis and OMV’s USD 16.5 bn acquisition of a 64% stake in the UAE’s Borouge and Saudi Aramco’s USD 3.5 bn acquisition of South America’s Primax. The two plays were part of a broader push that saw MENA outbound activity rise 30% y-o-y to 126 transactions worth USD 24.4 bn. The UAE and KSA alone accounted for 87% of the region’s total outbound value in 1H 2025.

Cross-border activity hit a five-year high in 1H, making up 55% of the region’s total transaction volume and 78% of value. That is 233 M&As worth USD 45.9 bn. Chemicals and technology were the star sectors, contributing 67% of cross-border transactions value.

Inbound M&A into MENA rose 53% y-o-y to 107 transactions worth USD 21.5 bn, up from USD 6.4 bn last year, with the UAE capturing 50% of inbound volume and 98% of inbound value. Austria contributed 77% of inbound value into the region thanks to Borealis and OMV’s Borouge buyout.

On the domestic front, MENA logged 192 transactions in 1H, up 22% y-o-y in volume and 94% in value at USD 12.8 bn, representing 45% of total activity and 22% of overall value, led by diversified industrials and technology. The UAE’s G42 USD 2.2 bn acquisition of 40% of Khazna Data Center was the region’s largest domestic acquisition.

Government-related entities and sovereign wealth funds played an important part, with players like ADIA, PIF, and Mubadala behind USD 21 bn in transaction value across 54 transactions, underscoring their role as long-term capital allocators.

Looking ahead, “stable oil prices, ongoing infrastructure development, and a strategic focus on technology, chemicals, and industrials are creating solid foundations for sustained activity,” EY MENA M&A and ECM head Anil Menon said in the report. Throughout 2025, EY expects “intensifying competition for high-quality assets, particularly those that align with national transformation agendas and offer strategic value beyond financial returns.”

MARKETS THIS MORNING-

Asian markets are mostly in the red in early trading this morning. The Kospi is leading losses, down almost 2.0% and Japan’s Nikkei is not far behind, looking at losses of 1.6%. The Hang Seng is also in the red, while the Shanghai Composite is up 0.1%.

THE CLOSING BELL-

The DFM rose 0.4% yesterday on turnover of AED 514.5 mn. The index is up 19.2% YTD.

In the green: Ekttitab Holding Company (+14.6%), Ithmaar Holding (+8.3%) and Commercial Bank of Dubai (+4.0%).

In the red: Dubai National Ins. and Reins. (-8.2%), Chimera S&P UAE Shariah ETF - Share class B - Income (-6.2%) and Chimera S&P UAE UCITS ETF - Share Class A - Accumulating (-3.1%).

Over on the ADX, the index inched down 0.03% on turnover of AED 1.3 bn. Meanwhile, Nasdaq Dubai was up 0.2%.