Middle East’s resilient M&A market defies global slowdown with 19% deal increase in 2025

The Middle East’s mergers and acquisitions (M&A) scene has really shown some impressive resilience and growth during the first half of 2025, quite frankly defying the global slowdown that’s led to fewer deals worldwide. Based on PwC Middle East’s 2025 TransAct mid-year update, the region managed to tally up 271 deals in the first six months—that’s a 19% jump compared to 228 deals in the same period last year. Interestingly enough, this growth stands in stark contrast to the worldwide decline of about 9%, which highlights how the Middle East continues to push forward, even amid broader economic uncertainties.

So, what’s driving this upward trend? Well, a big part of it comes from sovereign wealth funds, local investors, and corporate players mainly focusing on mid-market deals. These deals tend to be easier to finance and wrap up faster, which makes them particularly attractive. Plus, they’re often closely aligned with national priorities like promoting local industries, digital sovereignty, and economic diversification. Romil Radia, Deals Markets Leader at PwC Middle East, pointed out this shift, noting that the focus on mid-sized, impactful deals shows a clear emphasis on strategic assets that support key goals, like developing digital and green infrastructure.

The key sectors behind this boost include technology, the energy transition space, and healthcare. For example, some landmark deals really stand out: G42’s $2.2 billion purchase of a 40% stake in Khazna Data Centres and Saudi Arabia’s ambitious $100 billion Project Transcendence AI initiative. These reflect the region’s ambition to be a global leader in digital infrastructure and cutting-edge tech. Also, investments in green hydrogen, renewables, and sustainable transport by sovereign funds are playing a crucial role—they’re helping to meet decarbonisation targets and encourage long-term economic growth.

Healthcare, too, is seeing significant consolidation, which supports localising the healthcare system while expanding access to top-tier medical services across the region. This broader focus not only strengthens resilience in critical infrastructure but also highlights how diverse the Middle East’s strategic growth areas are becoming.

Looking back at 2024, PwC’s comprehensive 2025 TransAct report showed a slight dip—about 4%—in deal volume compared to 2023. There were 475 deals that year, versus 493 the year before. Still, that’s a far cry from the global decline of roughly 17%. The region’s knack for keeping deal counts high during a global downturn is largely thanks to big transactions in AI, renewable energy, and infrastructure sectors. Countries like Saudi Arabia, the UAE, and Egypt have been pushing hard to attract private and foreign investments, and sovereign wealth funds along with regional corporations are also expanding their reach worldwide—all gearing up for a strong 2025.

Private equity activity has ticked up slightly, with more inbound deals signaling solid external confidence in the Middle Eastern markets. In 2024, total deal value hit around $39 billion from 475 transactions—showing not just volume but also higher deal sizes, many exceeding $1 billion. This trend points towards bolder, larger deals designed to fuel transformative growth through innovation and sustainability themes, which are especially relevant as countries pivot to green energy solutions and advanced digital infrastructure.

The region’s focus on innovation and sustainability seems to have a positive ripple effect across numerous sectors, boosting overall market confidence. Governments and sovereign wealth funds are actively channeling investments into projects aligned with these priorities, positioning the Middle East as a hotspot for groundbreaking economic activity. This strategic approach stands out, especially considering the cautious global climate, which is often hampered by economic headwinds and trade challenges.

Looking ahead, PwC analysts believe that M&A activity in the Middle East will keep thriving, driven primarily by deals within the region and between neighboring countries. Specifically, mid-sized transactions targeting strategic and high-growth sectors—like green energy, healthcare, and digital infrastructure—are expected to be the key drivers of future growth. These sectors are seen as practical avenues for unlocking new value and fueling industrial transformation across the region. Basically, the Middle East appears to be adopting a balanced approach—aiming high but staying pragmatic about investment strategies.

All in all, even with global economic headwinds still present, the Middle East’s M&A market clearly shines as a resilient and forward-thinking landscape. Sovereign investments, smart reforms, and a diversified focus on emerging sectors give the region the strength to not only withstand global uncertainties but to also boost its influence in high-growth markets worldwide. As Gulf countries continue pushing policies on localisation, digital sovereignty, and sustainability, it looks like the Middle East’s M&A momentum will probably stay strong through the rest of 2025—and beyond.

Source: Noah Wire Services