Middle East M&A activity increased 33% year-on-year in 2025, reaching 635 completed transactions and returning to 2022 peak levels. The region outperformed a cautious global dealmaking environment, according to PwC Middle East’s 2026 TransAct Middle East report released on February 16, 2026.
Intra-regional transactions rose to 320 deals, up 35% from the previous year and accounting for approximately half of total regional deal activity. Meanwhile, inbound M&A deals increased from 182 in 2024 to 238 in 2025, marking the first material rebound in foreign investment since 2023.
Regional Capital Drives Transaction Growth
Domestic and intra-regional transactions served as the primary drivers of Middle East M&A activity in 2025. The UAE completed 207 deals, Saudi Arabia recorded 169 transactions, and Egypt saw 172 deals. This concentration reflects the continued development of national champions as governments advanced domestic capability agendas.
The recovery in inbound activity reflected renewed confidence in the region’s macroeconomic stability and investment opportunities. Consequently, the region emerged as a standout market for value-driven dealmaking, underpinned by resilient economic fundamentals and strong sovereign balance sheets.
Corporate Buyers Lead Middle East M&A Execution
Corporates led execution across the region, completing 383 transactions and accounting for approximately 60% of total deal volume. Private equity participation strengthened as well, with 252 completed deals during the year. Activity focused on platforms with resilient demand and strong fundamentals, particularly across healthcare, digital infrastructure, and industrial technology.
Sovereign wealth funds and state-backed entities continued to play a pivotal role throughout this landscape. Their involvement provided patient capital and confidence, enabling transactions tied closely to national transformation priorities. As a result, M&A was increasingly used to develop domestic platforms and accelerate economic diversification.
AI Investment Reshapes Deal Activity
AI is emerging as a defining force in Middle East dealmaking, supported by sovereign capital and national transformation agendas. Rising demand for data processing and compute capacity is redirecting investment toward energy-intensive, asset-backed platforms. Activity across data centres, cloud infrastructure, and advanced computing reflects this structural reallocation of capital.
Dealmaking in the Middle East is no longer about scale alone, it is being used to build ecosystems and anchor long-term economic transformation.
Romil Radia, Deals COO and Regional Valuations Leader at PwC Middle East
Future Outlook for Regional Dealmaking
Deal activity reflects a shift toward capability-led investment, particularly across AI, digital infrastructure, and data-intensive systems. Capital has increasingly flowed toward assets that enable scale over time, accelerating the convergence of technology, industrial, and infrastructure platforms. Rather than targeting individual assets in isolation, investors focused on building interconnected systems that support reliability and efficiency.
The region enters 2026 positioned to use M&A as a strategic instrument to support resilience and sustainable long-term growth. As sector boundaries continue to blur, competition increasingly centres on strategic depth rather than asset accumulation.