The MENA region recorded a robust 26% rise in merger and acquisition (M&A) activity with 884 deals, compared to 701 in 2024 with the total deal value reaching $106.1 billion, according to the EY MENA M&A Insights 2025 report.

This indicates a 15% increase on the previous year’s $92.3 billion deals, it said. The GCC region accounted for the majority of deals at 685, valued at $102.1 billion. 

This expansion was largely fuelled by enabling regulations, ongoing economic diversification initiatives and disciplined deal-making. Cross-border M&As dominated the region, making up 54% of the volume and 61% of the value. 

Sovereign wealth funds (SWFs), such as Abu Dhabi Investment Authority (ADIA) and Mubadala from the United Arab Emirates (UAE) as well as the Public Investment Fund (PIF) from the Kingdom of Saudi Arabia (KSA), remained among the primary catalysts of M&A activity in MENA.

Brad Watson, EY-Parthenon MENA Leader, says: “The MENA M&A market remained resilient in 2025, with deal volume as well as value rising significantly. Cross-border transactions were the main driver of this upward curve, highlighting the increasing appetite of companies for international expansion and diversification. Governments continued to invest steadily, supported by robust economic growth, low public debt, SWF backing and broader economic diversification initiatives. Rising foreign direct investment (FDI) added further momentum.”

The region’s three largest deals of 2025 were concentrated in the UAE, led by the acquisition of a 64% stake in Borouge by the Austrian oil giant OMV and its subsidiary Borealis for $16.5 billion. This was followed by the acquisition of an 84.76% stake in Modon Holding by L’IMAD Holding Company, owned by the Abu Dhabi Government for $13.8 billion. The third-largest deal was the acquisition of a 42.2% stake in 2PointZero by Multiply Group, an Abu Dhabi-based investment holding company, for $7.7 billion. 

Cross-border deals saw notable increases 

Inbound deal volume increased by 37% to 223 deals, while deal value surged to $25.4 billion, more than double compared to last year’s $11.4 billion, reflecting sustained confidence in the region’s evolving economic landscape. Austria emerged as the top investor country, accounting for 65% of total inbound deal value with three major transactions in the chemical sector. 

Meanwhile, outbound deals grew in volume by 29% year on year (y-o-y) to 256 deals and reached a combined value of $39.2 billion, representing 37% of the total. Government-related entities (GREs) remained major contributors to MENA dealmaking in 2025, making up 64% of overall outbound deal value. Canada attracted the highest outbound deal value from MENA investors at $7.1 billion, while the United States retained its position as the preferred target destination in terms of deal volume. 

North America, Europe and Asia together accounted for 44% and 39% of cross-border deals by volume and value respectively.

In terms of sectors, technology and diversified industrial products were the leading contributors to overall deal volume at 38%. 

Domestic deal activity witnesses robust growth

Domestic transactions played an important role in driving overall deal momentum in 2025. Domestic M&A transactions contributed 46% of the total deal volume at 405, compared to 339 deals in 2024. The combined disclosed value of domestic deals increased to $41.6 billion from $24.4 billion in the previous year. 

Domestic M&A activity in the region was led by the technology and consumer products sectors that together contributed 38% of the total domestic deal volume. In terms of value, the real estate (including hospitality and leisure) and asset management sectors accounted for a combined 55% of the total, reflecting diversified investments across key domestic industries.

Anil Menon, EY-Parthenon MENA Head of M&A and Equity Capital Markets Leader, said: “2025 was a remarkable show of MENA M&A market resilience. The significant increase in M&A market activity was inspite of regional political unrest, significant global trade policy uncertainties and a once-in-a-generation tech transformation led by AI. These are times of significant shift in fundamental value of assets and we expect M&A to be deployed surgically by corporates and SWFs to drive enduring competitive advantage.” 

Banking and capital markets India appetite 

The banking and capital markets sector accounted for 14% of MENA’s total outbound deal value in 2025. The region’s banks and financial institutions are actively investing in Indian banks and non-banking financial companies (NBFCs), supported by India’s strong economic growth, expanding credit demand, resilient financial system and its rapidly growing base of digital users. Notable transactions include Emirates NBD’s $4.4 billion deal with RBL Bank, IHC’s $1.1 billion  investment in Sammaan Capital and ADIA’s investment in IDFC First Bank, the report said. – TradeArabia News Service