MENA mergers and acquisitions see significant increase in Q1 2025, reaching $46bn in transactions

Merger and acquisition (M&A) activities in the Middle East and North Africa (MENA) region experienced a significant surge during the first quarter of 2025. A report by EY revealed that there were 225 deals amounting to a total of $46 billion, marking a substantial increase in both deal volume and value compared to the same period in 2024. Cross-border transactions played a crucial role in driving M&A activity, with 117 deals worth $37.3 billion, representing over half of the total volume and a significant portion of the total value. This surge in cross-border activity is the highest seen in the past five years, indicating companies’ efforts to seek growth and diversification beyond their local markets.

According to Brad Watson, the MENA EY-Parthenon leader, the region’s M&A landscape remains robust in 2025, buoyed by regulatory reforms, policy changes, and a positive macroeconomic outlook. Factors such as lower interest rates and improved investor sentiment have contributed to the steady rise in M&A transactions within the region. Moreover, the increase in domestic M&A activity aligns with the IMF’s projection of a 3.6% GDP growth rate for the MENA region as companies pivot their strategies to accommodate the need for diversification, digital transformation, and the integration of emerging technologies.

The UAE maintained its status as the top target country for M&A deals in the MENA region, with 63 deals totaling $20.3 billion in Q1 2025. Kuwait followed closely behind with $2.3 billion in deal proceeds, driven by significant transactions in the Diversified Industrial Products and Power & Utilities sectors. On the outbound front, Canada attracted the highest deal value from MENA investors at $6.4 billion, with the US remaining a popular destination in terms of deal volume.

Sovereign Wealth Funds (SWFs) such as ADIA, PIF, and Mubadala, along with other government-related entities (GREs), played a crucial role as key players in M&A transactions during the quarter, aligning with national diversification strategies. Domestic M&A activity also witnessed a substantial growth, with a 20% increase in volume and deal value soaring to $8.7 billion in Q1 2025. The technology sector emerged as a key player in domestic M&A, contributing significantly in terms of value and volume.

Intraregional deals involving countries like the UAE, Kuwait, and Saudi Arabia accounted for a significant portion of total domestic deal value, highlighting the ongoing regional integration across sectors such as technology, industrials, and real estate. The MENA region continued to attract strong foreign direct investment (FDI), with inbound deal volume increasing by 21% and reaching $17.6 billion. The UAE captured the majority of inbound deal volume and value, with Austria emerging as the top investor country, led by a significant transaction in the chemicals sector.

Outbound M&A activity saw substantial growth, with investments from the UAE and Saudi Arabia driving the surge in deal volume, totaling $19.7 billion. The chemicals and oil & gas sectors led in terms of outbound deal value, while technology, industrial products, and professional services recorded the highest number of outbound transactions. The UK emerged as a leading destination for outbound M&A deals by volume, with key transactions such as ADNOC and Austria’s joint acquisition of Canada’s Nova Chemicals for $6.3 billion signaling the region’s strong presence in the global M&A landscape.