Mideast and North African Regions Experiences Increase in Mergers and Acquisitions, Aggregating to a Deal Value of $46 Billion in Q1 2025
In the first quarter of 2025, the Middle East and North Africa (MENA) region witnessed a significant increase in mergers and acquisitions (M&A), with a 31% surge in deal volume and a 66% rise in total value compared to the previous year. According to the EY MENA M&A Insights 2024 report, the deal volume reached 225, and the total deal value soared to $46 billion.
The United Arab Emirates (UAE) remained the region's top destination for M&A, accounting for 63 deals worth $20.3 billion. Kuwait followed, with deal value primarily driven by transactions in the industrial and utilities sectors, amounting to $2.3 billion.
Cross-border activity led the growth, accounting for 52% of deal volume and 81% of total value at $37.3 billion – the highest level in five years. This trend indicates a broader strategic push by companies to diversify beyond domestic markets.
Domestically, M&A also saw steady growth, contributing 48% of the total deal volume. The technology sector emerged as a key driver, making up 37% of domestic deal value. One of the notable deals involved Abu Dhabi-based Group 42 acquiring a 40% stake in Khazna Data Centres for $2.2 billion.
The UAE, Saudi Arabia, and Kuwait dominated intraregional transactions, accounting for 83% of domestic deal value. Meanwhile, Canada attracted the highest outbound deal value from MENA investors at $6.4 billion, while the U.S. led in deal volume.
Inbound foreign direct investment also saw a significant surge, reaching $17.6 billion – a dramatic increase from $2.5 billion a year earlier. Austria led inbound investment, primarily through a major deal in the chemicals sector.
EY analysts anticipate that the momentum in M&A activity will continue through 2025, with technology, energy, and consumer sectors expected to drive further activity. The analysts attribute this anticipated growth to regional reforms and increasing investor confidence. The trend of digital transformation and the integration of emerging technologies in the MENA region could contribute to the growth in these sectors.
In conclusion, the MENA region's M&A activity is predicted to maintain its robust growth trajectory, driven by strategic realignments and the pursuit of diversification and digital transformation.
Investors in the technology sector are seeing opportunities in the MENA region, as evidenced by the Abu Dhabi-based Group 42's acquisition of a 40% stake in Khazna Data Centres for $2.2 billion, which contributes to the sector making up 37% of domestic deal value. Furthermore, with analysts anticipating that the technology, energy, and consumer sectors will drive future M&A activity, it is clear that technology is a potential area for investment in finance within the region.
