Dubai, UAE — The Middle East and North Africa (MENA) region has kicked off 2025 with a remarkable surge in mergers and acquisitions (M&A) activity, according to the latest EY MENA M&A Insights 2024 report.
The first quarter of the year saw a substantial 31 percent increase in deal volume, reaching 225 transactions, up from 172 in Q1 2024. Even more impressively, the total deal value skyrocketed by 66 percent to $46.0 billion, a significant jump from $27.6 billion in the same period last year.
Cross-border deals were the primary engine behind this growth, accounting for 52 percent of the total deal volume (117 deals) and a commanding 81 percent of the total deal value ($37.3 billion).
This marks the highest cross-border deal activity in both volume and value for a first quarter in the past five years, underscoring a growing trend of companies seeking growth and diversification beyond their domestic markets.
“In 2024 we saw a steady flow of M&A deals and the MENA region continues to exhibit a robust influx of M&A transactions in 2025,” commented 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.”
UAE Leads as Top M&A Target
The United Arab Emirates (UAE) cemented its position as the top target country for M&A activity in Q1 2025, attracting 63 deals totaling a substantial $20.3 billion. Kuwait followed with $2.3 billion in deal proceeds, boosted by two major transactions in the Diversified Industrial Products and Power & Utilities sectors.
Outbound investments from MENA saw Canada attract the highest deal value at $6.4 billion, while the USA remained the most popular destination by deal volume. Sovereign Wealth Funds (SWFs) like ADIA, PIF, and Mubadala, alongside other government-related entities (GREs), played a crucial role as M&A drivers, aligning with national economic strategies and diversification goals.
Domestic M&A and FDI Also on the Rise
Domestic M&A activity also witnessed a healthy increase, with a 20 percent rise in deal volume and a significant surge in deal value to $8.7 billion, compared to $1.69 billion in Q1 2024.
The technology sector led this domestic charge, contributing 37 percent of total domestic deal value. A notable domestic deal included Group 42, an Abu Dhabi-based AI and cloud computing firm, agreeing to acquire a 40 percent stake in Khazna Data Centres for $2.2 billion. Intraregional deals, particularly involving the UAE, Kuwait, and Saudi Arabia, accounted for 83 percent of total domestic deal value.
The MENA region also continued to be an attractive destination for foreign direct investment (FDI). Inbound deal volume surged by 21 percent, with deal value reaching $17.6 billion, a substantial increase from $2.5 billion in Q1 2024. The UAE remained the top recipient, capturing 53 percent of total inbound deal volume and 99 percent of the total inbound deal value.
Outbound Investment Reflects Diversification Efforts
Outbound M&A activity saw a 63 percent increase in deal volume compared to Q1 2024, with a total deal value of $19.7 billion. The UAE and Saudi Arabia spearheaded these outbound investments, accounting for 77 percent of total deal volume and 94 percent of total outbound value. While chemicals and oil & gas dominated outbound deal value, the volume was primarily focused on technology, diversified industrial products, and professional services, signaling the region’s broader strategy to diversify into high-growth global sectors.
A key outbound transaction involved ADNOC and Austria’s OMV AG agreeing to acquire Canada’s Nova chemicals for $6.3 billion, forming the new Borouge International Group.
Anil Menon, MENA EY-Parthenon Head of M&A and Equity Capital Markets Leader, anticipates continued momentum. “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,” Menon noted.
“The MENA deal book for the remainder of 2025 is promising and we can expect to see increased activity in consumer, technology, and energy sectors. In addition, with AI expected to drive material shifts in fundamental value, we can expect to see significant capital allocation in technology.”
