A new report on Middle East M&A activity shows that transactions reached an estimated 272 deals in the first half of 2026. This figure represents an 8% decline compared to the same period in the previous year. Meanwhile, Saudi Arabia and the UAE accounted for 65% of the total regional deal volume.
Specifically, Saudi Arabia recorded 74 transactions during this six-month period. According to the TransAct Middle East report by PwC, investors are focusing their capital on strategic sectors and technology-driven businesses. As a result, the market continues to show resilience despite geopolitical uncertainties.
Sector Performance and Deal Distribution
Out of the disclosed-value transactions, 151 deals were valued below 100 million USD. In addition, 12 transactions were valued between 101 million USD and 500 million USD. Notably, only one transaction exceeded the 500 million USD threshold during the first half of the year.
Corporate buyers completed 167 transactions, while private equity deals declined to approximately 105. Furthermore, financial services transactions fell from 75 in mid-year 2025 to 53 in mid-year 2026. Consequently, Middle East M&A volume was heavily concentrated in Saudi Arabia and the UAE.
Middle East M&A Sector Activity
Technology, media, and telecommunications became the most active sector in the region, recording 76 transactions. This represents a 41% increase compared to the previous year. The report highlights that Middle East M&A trends are increasingly driven by technology and digital transformation.
Most completed transactions in this sector focused on software, digital services, and artificial intelligence businesses. Meanwhile, larger investments progressed through partnerships and greenfield infrastructure. These developments are expected to create a pipeline for future consolidation.
Sovereign Capital and Regional Transactions
Inbound cross-border activity declined by approximately 19% during the first half of 2026. However, intra-regional dealmaking increased by 2% during the same period. State and sovereign-linked entities participated in at least half of the largest transactions in the region.
For example, the largest transaction was DEWA’s 1.41 billion USD acquisition of an additional 24% stake in Emirates Central Cooling Systems Corporation. Additionally, GFH Financial Group acquired a 60% stake in Byrne Equipment Rental for 400 million USD.
“The first half of 2026 tested the resilience of the Middle East’s deal market. Activity moderated, but investors remained focused on strategic growth, prioritising assets across energy, critical infrastructure and technology that can strengthen long-term value.”
Romil Radia, Partner at PwC Middle East
Future Outlook for Regional Deals
Looking ahead, deal activity is expected to remain focused on sectors that combine strategic relevance with long-term growth. Specifically, technology, critical infrastructure, and the energy transition will remain priority areas. Consequently, well-capitalized corporates will continue to shape the next phase of regional consolidation.
In conclusion, the market is shifting toward quality rather than sheer transaction volume. Businesses that combine technological capability with operational resilience will attract the most investment. Therefore, the regional market is preparing for a highly selective second half of 2026.
