MENA records 225 M&A deals worth $46bn in Q1
The MENA region witnessed 225 mergers and acquisitions (M&A) deals in Q1 2025, up from the 172 deals recorded in Q1 2024, reflecting a 31% increase in deal volume when compared year-on-year.
Total deal value rose by 66% to $46 billion in Q1 2025, when compared to $27.6 billion in Q1 2024, said the latest EY MENA M&A Insights 2024 report.
Cross-border deals were the primary driver of M&A activity in the MENA region, contributing 52% of total deal volume with 117 deals and 81% of total deal value at $37.3 billion. The first quarter of 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, says: '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 favorable 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% of total deal volume in Q1 2025. The rise in domestic M&A transactions aligns with the IMF projection that MENA GDP will grow by 3.6% 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.'
In the MENA region, the UAE remained the top target country with 63 deals totaling $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 & Utilities sectors.
During the first three months of 2025, Canada attracted the highest outbound deal value from MENA investors at $6.4 billion, while the US remained the preferred target destination in terms of deal volume.
Sovereign Wealth Funds (SWFs) like ADIA, PIF, and Mubadala, along with other government-related entities (GREs), remained key M&A drivers in Q1 2025, aligning with national economic strategies and diversification goals.
Domestic M&A activity rise
In the first quarter of 2025, M&A activity in the MENA region witnessed a 20% 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% of total domestic deal value and 27% of total domestic deal volume. The largest domestic deal during the first quarter of the year was a $2.2 billion acquisition where Group 42, an Abu Dhabi based AI and cloud computing firm, agreed to acquire a 40% stake in Khazna Data Centres, a digital infrastructure provider.
Intraregional deals involving the UAE, Kuwait, and Saudi Arabia (KSA) accounted for 83% of total domestic deal value and 56% of total domestic deal volume, highlighting strong intraregional M&A activity, particularly in the technology, industrials, and real estate sectors.
MENA region remains an attractive
The MENA region continues to emerge as one of the most attractive destinations for foreign direct investment during the first few months of 2025, with inbound deal volume surging by 21% and deal value reaching $17.6 billion, when compared to $2.5 billion in Q1 2024.
The UAE remains the leading destination for foreign direct investment in the MENA region in Q1 2025, capturing 53% of total inbound deal volume and 99% of the total inbound deal value. Austria was the top investor country, accounting for 94% of total inbound deal value, largely driven by a major transaction in the chemicals sector.
Diversification efforts
During the first three months of 2025, outbound deal volume increased by 63% when compared to Q1 2024, with a total deal value of $19.7 billion, contributing 43% 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% of total outbound value.
Though chemicals and oil & gas dominated in 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.
The UK was the leading destination for outbound M&A deals from MENA by volume, recording 13 transactions in Q1 2025. Canada and Peru together contributed 50% of total outbound deal value driven primarily by a major transaction in Canada's chemical sector. ADNOC and Austria's OMV AG has agreed to acquire Canada's Nova chemicals for US$6.3b by holding 46.94% each in the newly formed Borouge International Group.
Anil Menon, MENA EY-Parthenon Head of M&A and Equity Capital Markets Leader, says: '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.' -TradeArabia News Service
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Tribune
3 days ago
- Daily Tribune
Huawei leads Bahrain's 5G-AI transformation
TDT | Manama Huawei has deepened its role in shaping the region's digital future by signing a strategic partnership in Bahrain that will spearhead the deployment of next-generation 5G-Advanced and AI-powered technologies. The agreement with stc Bahrain reinforces Huawei's position as a global leader in driving smart connectivity and intelligent infrastructure across the GCC. The partnership, signed on Sunday, aims to transform Bahrain into a regional benchmark for 5G-A and AI integration. Huawei will lead efforts to deliver personalised digital services, smarter private networks and real-time enterprise tools that redefine industry standards. Accelerating digital innovation At the core of the agreement is Huawei's commitment to pushing the boundaries of what next-generation networks can deliver. The collaboration covers joint R&D, product innovation and the deployment of AI-driven Mobile Private Networks across key sectors such as logistics, manufacturing and critical infrastructure. 'This partnership reflects our shared vision for innovation through 5G-Advanced and AI,' said Steven Yi, Huawei Senior Vice President. 'Together, we will deliver transformative technologies that empower industries, enable new services and support Bahrain's national ambitions.' Smart networks and enterprise tools Huawei's technology will drive network optimisation, cloud-edge integration and intelligent automation, enabling faster service delivery and advanced connectivity for businesses. The deployment of AI-powered private networks is expected to bring mission-critical reliability, lower latency and improved efficiency to a wide range of industries. stc Bahrain, acting as a local partner, will contribute market insights and implementation capacity. Its leadership welcomed the opportunity to collaborate with Huawei on building future-ready services for the Kingdom. Investing in Bahrain's future In addition to infrastructure, the agreement prioritises talent development and ecosystem growth. Huawei plans to support local innovation by offering AI training programmes and collaborative research, helping to cultivate a new generation of Bahraini tech professionals. For Huawei, this milestone reaffirms its regional leadership in emerging technologies. For Bahrain, it marks a major leap toward building a resilient, AI-driven digital economy that is ready to lead in the Gulf and beyond.
Trade Arabia
13-06-2025
- Trade Arabia
L&T lands key Middle East grid infrastructure contracts
Indian engineering and construction conglomerate Larsen & Toubro (L&T) has announced that its Power Transmission & Distribution (PT&D) business vertical has secured new grid infrastructure orders in the Middle East as well in the Indian market. In the Middle East, the PT&D business has clinched orders for executing a set of 220kV and 132kV gas insulated substations on a turnkey basis, said L&T in a statement. These orders come from leading transmission asset owners and operators in the respective countries, it stated. In India, L&T has won an order to build 765kV and 400kV transmission line jobs pertaining to the integration of a Renewable Energy Zone in the southern state of Andhra Pradesh. These new orders mark a key milestone for PT&D in its pursuit of delivering future-ready grid infrastructure to help realise the energy transition and sustainable energy goals of its valued customers, it added.-TradeArabia News Service
Trade Arabia
11-06-2025
- Trade Arabia
EDGE, FAB sign strategic deal to build resilient financial ecosystem
EDGE Group, one of the world's leading advanced technology and defence groups, has entered a strategic partnership with First Abu Dhabi Bank (FAB). The agreement covers two major financial initiatives: the implementation of FAB's advanced Supply Chain Finance (SCF) solution and the deployment of its AI-powered Treasury Management System (TMS). EDGE said its deployment of FAB's AI-powered TMS represents the largest to date. The solution delivers real-time cash visibility, advanced forecasting capabilities, and integrated risk management tools, enabling EDGE to automate treasury operations and optimise liquidity across the Group. The platform provides protection for interest rate risk and FX risk, while improving financial agility, investment planning, and funding, it stated. EDGE Managing Director and CEO Hamad Al Marar said: "Our partnership with FAB is a strategic enabler of our global industrial ambitions. It reinforces the financial architecture required to operate at scale, with speed and resilience. In an increasingly competitive and complex environment, this alignment ensures we remain agile, well-capitalised, and positioned for sustained international growth." Group Head of Wholesale Banking Martin Tricaud said: "FAB's partnership with EDGE marks a step forward in building a more resilient supplier ecosystem. We recognise that effective cashflow and supply chain finance are fundamental to sustainable business models. By combining our global expertise with innovative financial solutions, we are enhancing financial agility and enabling long-term value creation." "Through FAB's digital SCF solution, EDGE provides local and international suppliers access to early, low-cost financing, which enhances supplier trust, improves commercial terms, and ensures continuity across critical operations," he added. Group Chief Financial Officer Rodrigo Torres said: "This partnership reflects EDGE's commitment to embedding financial sophistication and innovation at the core of our operations. By integrating FAB's advanced SCF and AI-powered TMS platforms, we are optimising liquidity and supplier performance while also reinforcing our ability to manage risk and scale with confidence." Torres, said to date, over AED1.6 billion in invoices have been processed, unlocking more than AED1.2 billion in off-balance sheet financing.
