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Despite global headwinds – from slower growth in advanced economies and heightened geopolitical fragmentation to new US tariffs – the Middle East’s mergers and acquisitions (M&A) market gained momentum in the first half of 2025.
In H1 of 2025, the number of deals closed in the Middle East reached 271, up from 228 the previous year. This 19% increase stands in sharp contrast with a 9% decline in global M&A volumes amid macroeconomic uncertainty, cautious capital allocation and tariff-linked market volatility.
“The growth in M&A underscores the region’s ability to adapt swiftly and sustain momentum through sovereign capital, ambitious reforms, and diversification into high-growth sectors,” said Romil Radia, Deals Markets Leader at PwC.
While mega deals dominate deal value, the PwC report found that H1 saw a notable shift in the number of mid-market transactions – deals that are easier to finance and faster to execute. “The shift towards mid-market, high-impact deals shows a sharp focus on strategic assets that are easier to fund and align with national goals like localisation, economic diversification and building digital and green infrastructure,” Radia said.
Source: PwC Analysis based on LSEG data
Technology, energy transition and healthcare continue to lead M&A activity in the region. Landmark transactions such as G42’s $2.2 billion acquisition of a 40% stake in Khazna Data Centers and Saudi Arabia’s $100 billion Project Transcendence AI commitment demonstrated the region’s ambition to lead in digital infrastructure and advanced technologies.
The report also highlights how sovereign-led investments in green hydrogen, sustainable transport, and renewable energy are accelerating decarbonisation and long-term growth. At the same time, consolidation in specialised healthcare is advancing localisation and expanding access to world-class care across the region.
Source: PwC Analysis based on LSEG data
UAE, Saudi Arabia and Egypt lead the pack
The UAE remained the region’s most active market with 95 deals, down slightly from 101 but still accounting for over a third of all activity within the region.
Zubin Chiba, Corporate Finance Leader at PwC, said: “The UAE’s position as the region’s most active M&A hub is underpinned by its ability to combine speed of execution with strategic clarity. A playbook of regulatory clarity, competitive capital markets and sectoral depth is enabling the UAE to attract both sovereign and private capital into future-ready industries, from fintech and renewable energy to healthcare and advanced industrials.”
The upturn in regional deal volume is particularly driven by a surge in Egypt, which saw 86 deals in H1 2025, nearly doubling its H1 2024 total of 48. Egypt, supported by an IMF programme and large-scale Gulf investment, is recovering, with GDP projected to grow by 3.8% in 2025.
Source: PwC Analysis based on LSEG data
M&A activity in Saudi Arabia also rose, from 54 to 59 deals in H1 of 2025, holding its ground as a key M&A market supported by industrial, TMT, and financial services activity. The Kingdom’s largest domestic deal, Elm Co’s 100% acquisition of Thiqah Business Services for $907 million, took place in the digital services sector, aligning closely with Saudi Arabia’s Vision 2030 goals to localise technology, drive innovation, and foster national champions in strategic industries.
Saudi’s dealmaking momentum is supported by a resilient macroeconomic backdrop: non-oil GDP growth is projected at 3.4% in 2025, inflation remains contained at 2.3%, and fiscal buffers are strong, enabling continued investment in strategic sectors.
Cross-border transactions also picked up pace, with intra-regional activity reaching 134 deals, up from 118 in H1 2024, underscoring growing integration and investor confidence across the region.
Source: PwC Analysis based on LSEG data
Looking ahead
Looking ahead toward the second half of 2025, PwC’s researchers said that the Middle East’s M&A landscape will continue to evolve as dealmakers navigate a complex global backdrop marked by cautious capital allocation, regulatory reform, and strategic realignment.
“Domestic and intra-regional dealmaking will likely continue to outpace outbound activity, driven by sovereign-backed deals, localisation agendas, and the scaling of national champions,” said Radia.
“We expect that mid-sized deals will continue to be the most practical route for building out capabilities, especially in sectors like digital infrastructure, green industry, and healthcare, which are closely tied to national transformation goals. Regulatory changes are also expected to make deal timelines clearer and faster, creating opportunities for investors ready to act in areas backed by policy and sovereign support.”
“Despite some market pressures, the region is well positioned to unlock new value, reshape industries, and strengthen its global influence in high-growth markets.”
M&A in the region
Previous research by EY and WTW also showed an increase in regional M&A activity during the first half of 2025. Although all three firms use different definitions and sources, meaning their numbers are not directly comparable, they do all agree on the overall trend: the region is outperforming global markets.
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