Deal activity across the Middle East and North Africa accelerated sharply in 2025, with total mergers and acquisitions reaching $106.1 billion, a 15% increase from the previous year, despite persistent global economic uncertainty. According to a new report by EY, total deal volume rose 26% year on year to 884 transactions, signalling sustained investor confidence across the region.

The Gulf Cooperation Council (GCC) dominated activity, accounting for 685 deals valued at $102.1 billion. The momentum reflects continued economic diversification efforts, reduced reliance on oil revenues, and strong government-backed investment frameworks.

“The MENA M&A market remained resilient in 2025, with deal volume as well as value rising significantly,” said Brad Watson, EY-Parthenon MENA Leader. He noted that cross-border transactions were the primary driver of growth, highlighting companies’ growing appetite for international expansion and portfolio diversification.

Governments across the region continued to deploy capital steadily, supported by solid economic growth, relatively low public debt levels, and the backing of sovereign wealth funds. Rising foreign direct investment also contributed to the increase.

Cross-border deals accounted for 54% of total volume and 61% of total value, underscoring the region’s growing global integration.

Sovereign wealth funds remained central to dealmaking. Public Investment Fund, Abu Dhabi Investment Authority, and Mubadala Investment Company were among the key drivers of regional and international acquisitions.

The United Arab Emirates hosted the region’s three largest transactions of 2025. The biggest involved OMV and its subsidiary Borealis acquiring a 64% stake in Borouge for $16.5 billion. This was followed by L’IMAD Holding Co.’s $13.8 billion acquisition of an 84.76% stake in Modon Holding. The third-largest deal saw Multiply Group acquire a 42.2% stake in 2PointZero for $7.7 billion.

Inbound transactions rose 37% year on year to 223 deals, with value more than doubling to $25.4 billion from $11.4 billion the previous year. Austria emerged as the leading inbound investor by value, driven by three major chemicals-sector deals.

Outbound activity also strengthened, rising 29% to 256 transactions worth $39.2 billion, representing 37% of total regional deal value. Government-related entities accounted for 64% of outbound value, reflecting continued state-led global expansion.

Canada attracted the highest outbound deal value from MENA investors at $7.1 billion, while the United States remained the most targeted destination by deal volume. Collectively, North America, Europe, and Asia accounted for 44% of cross-border deal volume and 39% of total value.

Sector-wise, technology and diversified industrial products accounted for 38% of transactions. Banking and capital markets accounted for 14% of outbound deal value, with regional financial institutions actively investing in India’s banking and non-banking financial sectors.

Notable banking transactions included 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.

Domestic dealmaking also gained momentum. Local transactions reached 405 deals in 2025, up from 339 in 2024, accounting for 46% of total deal volume. Disclosed domestic deal value rose to $41.6 billion from $24.4 billion the previous year.

Technology and consumer products led domestic deal volume, while real estate, including hospitality and leisure, alongside asset management, accounted for 55% of domestic deal value.

“The significant increase in M&A market activity was despite regional political unrest, global trade policy uncertainty, and a once-in-a-generation AI-led technology transformation,” said Anil Menon, MENA Head of M&A and Equity Capital Markets Leader. He added that shifting asset valuations are prompting corporates and sovereign wealth funds to deploy capital strategically to secure long-term competitive advantage.

The data highlights a regional M&A market that remains resilient, increasingly cross-border, and anchored by state-backed capital and strategic diversification agendas.