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Mergers and acquisitions (M&A) in the Middle East and North Africa (MENA) region surged in Q1 2025, with 225 deals valued at $46bn, according to EY’s latest MENA M&A Insights 2024 report.
This marks a 31 per cent increase in deal volume and a 66 per cent rise in deal value compared to Q1 2024.
Cross-border transactions remained the key driver of M&A activity, accounting for 117 deals worth $37.3bn — 52 per cent of total volume and 81 per cent of total value. This represents the highest quarterly cross-border activity in both value and volume in the past five years, as companies seek growth and diversification outside their domestic markets.
“The MENA region continues to exhibit a robust influx of M&A transactions in 2025,” said Brad Watson, MENA EY-Parthenon leader. “This is supported by regulatory reforms, policy shifts, and a favorable macroeconomic outlook, including easing interest rates and improved investor sentiment.”
Watson added that the steady rise in domestic M&A activity — 48 per cent of total deal volume in Q1 2025 — aligns with the IMF’s projection of 3.6 per cent GDP growth for the region. “Companies are realigning their strategies to better accommodate the need for diversification, digital transformation, and the integration of emerging technologies,” he said.
The UAE maintained its position as the top MENA target country, with 63 deals totaling $20.3bn in Q1 2025.
Kuwait followed with$2.3bn in deal proceeds, bolstered by two major transactions in the Diversified Industrial Products and Power & Utilities sectors.
Canada attracted the highest outbound MENA deal value at $6.4bn, while the US remained the most popular outbound destination by volume.
Sovereign Wealth Funds (SWFs) such as ADIA, PIF, and Mubadala, alongside other government-related entities (GREs), were key M&A players in the quarter, aligning with national diversification strategies.
Domestic M&A shows 20 per cent rise
Domestic M&A also showed strong growth, with a 20 per cent rise in volume and deal value jumping to $8.7bn from $1.69bn in Q1 2024.
The technology sector led domestic activity, contributing 37 per cent of value and 27 per cent of volume.
The largest domestic transaction was Abu Dhabi-based G42’s $2.2bn acquisition of a 40 per cent stake in Khazna Data Centres.
Intraregional deals involving the UAE, Kuwait, and Saudi Arabia represented 83 per cent of total domestic deal value and 56 per cent of volume, highlighting ongoing regional integration in the technology, industrials, and real estate sectors.
The region also continued to attract strong foreign direct investment (FDI), with inbound deal volume rising 21 per cent and value reaching $17.6bn — up sharply from $2.5bn a year earlier. The UAE captured 53 per cent of inbound deal volume and 99 per cent of value.
Austria emerged as the top investor country, accounting for 94 per cent of total inbound value, led by a major chemicals sector transaction.
Outbound M&A highlights
Outbound M&A saw a 63 per cent increase in deal volume and totaled US$19.7bn, driven by investments from the UAE and Saudi Arabia, which together contributed 77 per cent of outbound volume and 94 per cent of value.
While the chemicals and oil & gas sectors led in outbound deal value, the highest number of outbound transactions were in technology, industrial products, and professional services. The UK was the leading destination for outbound M&A by volume with 13 deals, while Canada and Peru together accounted for 50 per cent of outbound deal value.
A key transaction was ADNOC and Austria’s OMV AG’s joint acquisition of Canada’s Nova Chemicals for $6.3bn, through a new entity, Borouge International Group, in which both parties will hold a 46.94 per cent stake.
“The MENA deal markets remained resilient despite lack of clarity on two fronts: the impact of monetary policy on cost of capital and the ongoing tariff and trade discussions,” said Anil Menon, MENA EY-Parthenon head of M&A and Equity Capital Markets leader. “We can expect to see increased activity in consumer, technology, and energy sectors.
“With AI expected to drive material shifts in fundamental value, significant capital allocation in technology is likely.”
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