MENA Deal Count Slips but Value Heft Remains
Mergers and acquisitions across the Middle East and North Africa slowed in the first half of 2026, with 390 completed deals valued at US$46.7 billion, according to the latest EY MENA M&A Insights report. That represents a decline from the 434 deals worth US$58.8 billion recorded in H1 2025. However, the headline numbers conceal a sharp acceleration in activity as the second quarter progressed. May and June alone accounted for 61% of Q2 deal volume and 79% of deal value, while large transactions above US$500 million contributed nearly three-quarters of total value between March and June.
Domestic dealmaking staged a remarkable comeback. Between March and June, domestic transaction value surged to US$16.0 billion – more than four times the amount recorded during the same period a year earlier. The spurt was powered by big-ticket investments in real estate, power and utilities, and technology, with government-related entities playing a central role. Outbound activity remained robust: 119 cross-border deals worth US$25.5 billion were completed, led by investors from the UAE and Saudi Arabia. Standout transactions included Dubai Aerospace Enterprise’s US$7.0 billion purchase of Macquarie AirFinance and Saudi Electronic Gaming Holding Company’s US$6.0 billion acquisition of Shanghai Moonton Technology.
The Strategic Calculus Behind MENA’s Big-Ticket Dealmaking
Sovereign Capital Continues to Anchor Domestic Deal Flow
The dramatic jump in domestic deal value was not driven by private equity chasing momentum but by government-related entities executing long-term economic transformation mandates. National programs in the Gulf states – from Saudi Vision 2030 to the UAE’s “We the UAE 2031” – are funneling capital into infrastructure, clean energy, and digital economy assets. The concentration of mega-deals in real estate, power and utilities, and technology reflects exactly those priorities. This means the market’s floor is effectively set by sovereign liquidity, insulating it from the kind of cyclical drawdowns seen in other emerging markets.
Outbound Giants: UAE and Saudi Arabia Flex Their Financial Muscle
With 119 deals worth US$25.5 billion, outbound investment remained the single largest component of regional M&A by value. The two mega-deals alone – DAE’s aviation leasing acquisition and Savvy Games Group’s mobile gaming buy – accounted for over half of outbound value. The sectoral spread (technology, transportation, financial services, energy) shows a deliberate effort to import capabilities that accelerate home-grown diversification. The UAE’s role as the region’s most active outbound investor is reinforced by its mature financial ecosystem, while Saudi Arabia’s growing clout is tied to the Public Investment Fund and its portfolio companies.
Technology Steals the Spotlight Despite Geopolitical Headwinds
Inbound investment moderated as geopolitical uncertainty weighed on foreign appetite, but technology remained the standout sector. AI-driven solutions, enterprise digitalization, and software platforms attracted the largest share of inbound deal value between March and June. The UAE continued to lead as MENA’s most preferred destination for inbound capital, thanks to its diversified economy and business-friendly regulations. This suggests that when global allocators do lean into the region, they are overwhelmingly targeting the tech-enabled services that will define the next wave of economic activity – a signal that the region’s diversification narrative is gaining credibility beyond its borders.
What Corporate Leaders and Investors Should Watch in MENA M&A
- Expect fierce competition for tech-enabled assets. With technology leading inbound deal value and driving outbound interest, corporate acquirers and sovereign funds will increasingly compete for AI, enterprise software, and digitalization platforms. Bidders should factor in high valuations on premium targets, particularly those with established recurring revenue models.
- Partner with government-related entities on domestic infrastructure plays. The Q2 surge in domestic deals – heavily concentrated in real estate, power, and utilities – is dominated by state-linked players. Private capital can access this flow through joint ventures or co-investment structures tied to national transformation programs, especially in renewables and smart city projects.
- Monitor geopolitical flashpoints for an inbound rebound. Inbound activity was notably subdued by geopolitical concerns. Any sustained de-escalation or policy normalization – particularly around trade routes, sanctions, or regional security – could trigger a swift pickup in inbound deals, especially into the UAE. Advanced planning for target identification now could provide a first-mover advantage.
- Large-scale strategic bets are back – but quality matters. The dominance of transactions over US$500 million shows that conviction in high-value assets has returned. For corporate strategists, this means that transformational M&A is on the table, but only for targets that clearly advance long-term strategic objectives and enjoy robust fundamentals.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Overall deal count fell 10% year-on-year, and inbound investment remains dampened by geopolitics, which could suppress fee income for advisory and financial services firms. However, large-ticket domestic and outbound deals have offset much of the volume decline. |
| Competitive Risk | Medium | Sovereign wealth funds and government-related entities are increasingly dominant domestic buyers in real estate, power, and technology, potentially crowding out private-sector acquirers. Cross-border, UAE and Saudi investors are bidding up valuations for strategic tech and transportation assets. |
| Regulatory Risk | Low | Domestic regulatory environments in the Gulf remain supportive of M&A linked to national transformation agendas. Inbound regulatory risk is tied to broader geopolitical tensions rather than specific deal-blocking policies. |
| Reputation Risk | Low | The report focuses on aggregate activity; no single transaction or entity faces acute reputational exposure. Large sovereign-backed deals are generally well-received as markers of economic ambition. |
| Technology Disruption | Low | Technology is an opportunity, not a disruptive threat in this context. The data shows tech as the leading inbound sector, indicating incumbents are actively acquiring digital capabilities rather than being disrupted by them. |
| Commercial Opportunity | High | The Q2 surge in domestic value (up 4x on the same period last year) and robust outbound activity point to a deep pipeline of large-scale deals. Sectors prioritized by sovereign investors – real estate, power & utilities, technology – offer significant co-investment and advisory opportunities for private capital. |
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