Middle East’s M&A landscape enters 2026 with strong momentum
Building on a strong first half of the year, mergers and acquisitions (M&A) activity in the Middle East has gained momentum in a year marked by selective global capital deployment. That is according to a report from PwC, which showed a significant uptick in deals last year.
Global deal values rose by 36% in 2025 and deal volumes increased by only 1%, underlining how activity remained concentrated rather than broad-based. While investors did appear willing to make deals, they were more discerning and only went for M&As that were safe.
A defining trend of the year was the inward shift of capital. Intra-regional transactions rose to 320 deals, accounting for roughly 50% of total activity. Investment circulated primarily between the United Arab Emirates, Saudi Arabia, and Egypt, reinforcing these nations as the core hubs for regional deal-making.
Rather than pursuing uncertain cross-border expansion, corporates and sovereign-linked investors focused on domestic markets where regulatory alignment and operating familiarity reduced execution risk. This inward consolidation supported national transformation agendas, particularly in Saudi Arabia where 88% of chief executives expressed strong confidence in domestic growth.
“In Saudi Arabia there is a deliberate focus on building platforms, embedding advanced capabilities, and anchoring long-term growth aligned with Vision 2030,” said Imad Matar, Transaction Services leader at PwC in the Middle East.
“Government-led capital expenditure and regulatory reforms are opening the market to global buyers and local conglomerates, while capital is increasingly being deployed into AI, digital infrastructure, sports, entertainment, healthcare and clean energy.”
Role of sovereign wealth funds
Sovereign wealth funds continued to anchor this ecosystem, providing the long-term capital necessary to build capacity across priority sectors. These entities invested $127 billion globally in 2025, with a distinct pivot toward future-oriented industries.
The UAE’s Mubadala led this charge, deploying $33.7 billion across 40 transactions. This sovereign activity accelerated sector convergence, particularly between energy, industrials, and technology, effectively using deal-making as a mechanism to build national ecosystems rather than simply optimize financial returns.
Sector highlights
Energy investments prioritized system resilience over pure volume growth. The sector saw 34 transactions focused on securing supply chains and logistics infrastructure. Notable deals included the $1.4 billion acquisition of Brooge Petroleum & Gas Investment Company, which strengthened control over critical storage terminals.
In the technology space, artificial intelligence and digital infrastructure emerged as strategic imperatives. The $2.2 billion investment in Khazna Data Centers highlighted how data infrastructure has become as critical as traditional utilities.
Industrial manufacturing also saw sustained momentum with 136 transactions aimed at localization and supply chain security. Significant moves included the $1.05 billion acquisition of PAL Cooling Holding, reinforcing the region’s district cooling capabilities.
Meanwhile, the healthcare sector saw 41 deals, driven by a demand for specialized care and digital health platforms. The year also featured robust activity in public markets, with family-owned groups seeking capital through listings, such as Almoosa Health, which raised $450 million.
Outlook
Looking ahead, the region is well-positioned to maintain its competitive advantage through selective and strategic deal-making. The focus will remain on three key pillars: Scaling domestic champions, advancing digital infrastructure, and securing industrial resilience.
As sovereign capital continues to bridge execution gaps, the convergence of AI with traditional sectors will likely drive the next wave of transformative growth. The transition from simple asset accumulation to capability building suggests that the Middle East will continue to stand out as a resilient outlier in the global economy.
“Corporates and private equity investors are prioritizing deals that build resilience and capabilities,” said Zubin Chiba, Corporate Finance leader at PwC in the Middle East.
“In the UAE, the strong economic environment has translated into capital concentrating on assets anchored on a long-term investment thesis. Strategic alignment,operational familiarity, and robust partnership structures are helping to reduce execution risk while supporting sustainable, long-term growth.”
