UAE Leads MENA M&A Boom With 63 Deals in First Quarter 2025

The MENA region witnessed 225 mergers and acquisitions (M&A) activity deals in Q1 2025, up from the 172 deals recorded in Q1 2024, reflecting a 31 per cent increase in deal volume when compared year-on-year, according to the latest EY MENA M&A Insights 2024 report. Total deal value rose by 66 per cent to $46 billion in Q1 2025, when compared to $27.6 billion in Q1 2024.

The United Arab Emirates remained the top target country with 63 deals totalling $20.3 billion in Q1-2025. Kuwait ranked second in terms of deal proceeds, reaching $2.3 billion, driven by two major transactions in the diversified industrial products, and power and utilities sectors.

Cross-border deals were the primary driver of M&A activity in the MENA region, contributing 52  per cent of total deal volume with 117 deals and 81 per cent of total deal value at $37.3 billion. Q1 2025 recorded the highest cross-border deal activity both in volume and value when compared to the same period in the past five years, as companies increasingly pursued growth and diversification beyond domestic markets.

Brad Watson, MENA EY-Parthenon Leader, said: “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. This is supported by regulatory reforms, policy shifts and a favourable macroeconomic outlook, including easing interest rates and improved investor sentiment.”

“This growth is also reflected in the steady increase of domestic M&A activity, which contributed 48 per cent of total deal volume in Q1 2025. The rise in domestic M&A transactions aligns with the International Monetary Fund (IMF) projection that MENA GDP will grow by 3.6 per cent this year and is further supported by the strong global M&A momentum. Companies are realigning their strategies to better accommodate the need for diversification, digital transformation and the integration of emerging technologies.”

During the first three months of 2025, Canada attracted the highest outbound deal value from MENA investors at $6.4 billion, while the USA remained the preferred target destination in terms of deal volume.

In Q1 2025, M&A activity in the MENA region witnessed a 20 per cent increase in deal volume while deal value rose significantly reaching $8.7 billion as compared to $1.69 billion recorded in Q1 2024.

The technology sector led domestic M&A activity in MENA in Q1 2025, contributing 37 per cent of total domestic deal value and 27 per cent of total domestic deal volume. The largest domestic deal during Q1 2025 was a $2.2 billion acquisition where Group 42, an Abu Dhabi based AI and cloud computing firm, agreed to acquire a 40 per cent stake in Khazna Data Centres, a digital infrastructure provider.

Intraregional deals involving the UAE, Kuwait and the Kingdom of Saudi Arabia accounted for 83 per cent of total domestic deal value and 56 per cent of total domestic deal volume, highlighting strong intraregional M&A activity, particularly in the technology, industrials and real estate sectors.

The MENA region continues to emerge as one of the most attractive destinations for foreign direct investment (FDI) during the first few months of 2025, with inbound deal volume surging by 21 per cent and deal value reaching $17.6 billion, when compared to $2.5 billion in Q1 2024.

The UAE remains the leading destination for FDI in the MENA region in Q1 2025, capturing 53 per cent of total inbound deal volume and 99 per cent of the total inbound deal value. Austria was the top investor country, accounting for 94 per cent of total inbound deal value, largely driven by a major transaction in the chemicals sector.

During the first three months of 2025, outbound deal volume increased by 63% when compared to Q1 2024, with a total deal value of US$19.7b, contributing 43 per cent of overall deal value. The UAE and KSA led the outbound investment from the MENA region, accounting for 77% of total deal volume and 94 per cent of total outbound value.

Though chemicals and oil and gas dominated outbound deal value, outbound deal volume was primarily focused on technology, diversified industrial products and professional services. This trend reflects the region’s broader diversification strategy into high-growth global sectors.

Anil Menon, MENA EY-Parthenon Head of M&A and Equity Capital Markets Leader, said: “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. 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.”