A new report by Ernst & Young (EY) reveals that MENA M&A deals reached a total value of $46.7 billion across 390 transactions during the first half of 2026.
Although this represents a decline from the 434 deals valued at $58.8 billion recorded in the first half of 2025, the market demonstrated resilience. Specifically, geopolitical developments influenced the initial slowdown, but activity accelerated significantly during the second quarter.
Quarterly Acceleration and Key Drivers
The second quarter of 2026 witnessed a substantial increase in transaction values, rising to $25 billion compared to $12.2 billion in the second quarter of 2025. Notably, May and June accounted for 61% of the total deal volume and 79% of the total deal value during the second quarter. Furthermore, large-scale transactions valued at over $500 million contributed to nearly three-quarters of the total value recorded between March and June.
“The first half of 2026 shows the strength of the merger and acquisition market in the MENA region, where strategic investors continued to pursue long-term growth opportunities despite a more conservative global investment environment.”
Brad Watson, EY-Parthenon MENA Leader
Watson added that domestic capital deployment, active sovereign wealth funds, and economic diversification efforts helped maintain market momentum. Consequently, the improvement at the end of the second quarter indicates growing confidence in the region’s long-term investment outlook.
Domestic and Outbound MENA M&A deals
The report highlighted that domestic and outbound transactions remained the primary drivers of MENA M&A deals during this period. Domestic deal values between March and June reached $16.0 billion, representing a fourfold increase compared to the same period last year. This growth was driven by major transactions in the real estate, energy, utilities, and technology sectors, with government-related entities leading the activity.
Meanwhile, outbound transactions maintained their momentum with 119 deals valued at $25.5 billion in the first half of the year. Investors from the United Arab Emirates and Saudi Arabia were the most active in acquiring international assets. Specifically, Dubai Aerospace Enterprise acquired Macquarie AirFinance for $7.0 billion, while the Saudi Electronic Gaming Holding Company acquired Shanghai Moonton Technology in the gaming sector for $6.0 billion.
Sovereign Wealth Funds and Technology Focus
Although inbound transactions slowed due to geopolitical uncertainty, the technology sector remained a primary focus for international investors. Specifically, investments targeted artificial intelligence, digital transformation, enterprise software, and tech-enabled business services. The United Arab Emirates remained the preferred destination for inbound investment due to its supportive regulatory environment and diversified economy.
Additionally, sovereign wealth funds and government-related entities continued to play a central role in regional transactions. Major institutions, including the Abu Dhabi Investment Authority, the Public Investment Fund, and Mubadala, directed capital toward strategic sectors. These investments align with long-term national economic diversification goals across the region.
Future Outlook for Regional Transactions
Looking ahead, market experts expect the regional transaction environment to remain disciplined yet active. Anil Menon, EY-Parthenon MENA M&A and Capital Debt Advisory Leader, stated that investors are prioritizing transactions that support long-term strategic goals. As market conditions stabilize, analysts expect high-quality strategic assets to remain at the forefront of MENA M&A deals.
