Middle East consolidates its position as global dealmaking hub
The Middle East’s M&A scene has consolidated its position as one of the world’s most strategically important dealmaking hubs, as M&A and private capital activity continue to outperform global trends. That is according to a new report from Lumina.
Total M&A deal value in the Middle East and North Africa (MENA) rose by 87% year-on-year in 2025, driven by a combination of sovereign-backed mega-transactions and accelerating mid-market activity. Growth was recorded across inbound, outbound and intra-regional corridors.
Inbound deal values almost tripled in 2025 with major acquisitions across software, healthcare and aerospace. Outbound deal values rose by 92% over the same period, primarily driven by sovereign-led mega-transactions aligned with national priority sectors. These included AI and digital infrastructure, digital entertainment and gaming, chemicals and logistics, reinforcing the region’s long-term diversification agendas.
The Lumina report highlights how sustained growth across inbound and outbound M&A in recent years has played a central role in building capability, scale and execution depth across the region.
Reflecting on how this evolution is shaping deal flows, Juel Chowdhury, Associate Partner at Lumina, said: “Consistent inbound and outbound M&A has helped sectors deepen and mature across the Middle East, significantly increasing the quality, complexity and availability of assets now coming to market. As a result, regional consolidators are increasingly looking closer to home for acquisition opportunities, positioning intra-regional M&A as the key corridor to watch in 2026.”
Private equity momentum
Private equity deal values in the Middle East increased by 73% year-on-year in 2025, signalling growing confidence in the region’s investability and depth. Inbound activity was increasingly focused on the TMT sector (telecom, media and technology), with five of the ten largest transactions concentrated across digital, technology and data-driven businesses.
Outbound private equity activity was largely driven by sovereigns, with eight of the ten largest outbound transactions involving sovereign participation.
Intra-regional activity also rebounded during the year, reflecting a growing trend of capital raised within the region being redeployed back into regional assets, a dynamic increasingly evident across both private equity and private credit strategies.
“Global private equity firms are increasingly positioning for regional growth by establishing and expanding local platforms,” said Andrew Nichol, Senior Partner at Lumina. “Firms such as KKR, Permira and Adams Street Partners not only launched new offices across the region in 2025, but also completed landmark regional transactions during the period, underscoring long-term commitment to the market.”
The shift in FDI
The report further found that foreign direct investment (FDI) into the UAE reached record levels in 2024, the latest full-year data available, with momentum carrying into 2025 based on most recent results. The UAE ranked second globally for the number of announced FDI projects, behind only the United States, reinforcing its position as a leading regional and global destination for foreign investment.
Saudi Arabia’s FDI performance remained resilient in 2024, based on the latest full year results published, and showed a strong rebound in 2025, with the latest available run-rate indicating a near doubling of 2024 inflows. While overall volumes strengthened, the composition of FDI shifted markedly during the period.
Capital is increasingly being channelled into frontier and high-value sectors in the Kingdom, including AI, digital infrastructure, advanced manufacturing and semiconductors, reflecting the Kingdom’s ongoing realignment toward advanced industrial capability and technology-led growth under Vision 2030.
UK corporates deepen their regional footprint
Having conducted similar analysis of the UK market (Lumina operates in both the UK and the UAE), the authors concluded that business ties between the two regions have been on an upward trajectory for several years – a trend that is also increasingly reflected in the deals landscape.
UK-listed companies continue to expand their presence across the Middle East, with the region now accounting for almost 20% of global revenues. Revenue growth has been strongest across aerospace and defence, telecommunications, engineering and infrastructure, driven by participation in long-term programmes and multi-year contracts in sectors that provide strong revenue visibility.
“These dynamics have reshaped UK PLCs’ operating models in the region which has evolved from a ‘fly-in, fly-out model’ to deployment of on-the-ground capability,” said Chowdhury.
UK PLCs now recognise the importance of greater on-the-ground presence, driven by localisation agendas such as ‘IKTVA’ and ‘Make it in the Emirates’, alongside a drive to secure regional supply chains in sectors of national priorities. This has encouraged UK corporates to integrate more deeply into regional value chains, improving competitiveness and enhancing deliverability.
Looking ahead
Commenting on the outlook for 2026, George Traub, Managing Partner at Lumina, said, “The outlook for Middle East M&A in 2026 remains positive. As regional sectors continue to deepen and mature, a broader pool of scalable, increasingly sophisticated assets is emerging, supporting more active intra-regional dealmaking and private equity activity.”
“In parallel, sovereigns are expected to double down on investment in frontier sectors aligned with national priorities, which are set to shape regional economies in line with long-term national priorities. Together, these dynamics are reinforcing the Middle East’s position as an increasingly influential centre for global dealmaking.”
