MENA M&A 2025: Inside the Cross-Border Surge Fueled by SWFs and Strategic
Lead Researcher
Layla Al-Mansoori
In 2025, the MENA region witnessed a record $106.1 billion in M&A activity,
MENA M&A 2025: Inside the Cross-Border Surge Fueled by SWFs and Strategic Sector Shifts
Date of Analysis: February 2026
Source Data: EY-Parthenon MENA M&A Report (Released February 15, 2026)
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The $106 Billion Milestone: Resilience or Realignment?
The Middle East and North Africa (MENA) mergers and acquisitions market recorded aggregate transaction value of $106.1 billion in 2025, representing a 15% year-on-year increase. Deal volume reached 884 transactions, rising 26% compared to 2024 (Source 1: EY-Parthenon Primary Data). These figures represent the highest annual totals recorded for the region in the current economic cycle.
Contrary to characterizations of a generalized "boom," the volume-to-value ratio reveals a structural shift. While deal count grew by 26%, value grew by only 15%, indicating that the market is not experiencing a flood of speculative small-ticket transactions but rather a concentration of larger, higher-conviction strategic bets. The average deal size across the region remained elevated, driven by a handful of megadeals rather than broad-based retail activity.
This activity occurred despite sustained regional political unrest and significant global trade policy uncertainties—including tariff renegotiations and supply chain realignments. The decoupling from short-term volatility suggests that underlying strategic drivers, rather than market sentiment, are dictating capital deployment.
"These are times of significant shift in fundamental value of assets... M&A to be deployed surgically," noted Anil Menon, Senior Advisor at EY-Parthenon (Source 2: EY-Parthenon Interview). This framing is critical: the data does not support a narrative of opportunistic buying. Instead, it describes a market where state-aligned capital is being channeled toward specific, pre-identified structural advantages.
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The SWF Engine: From Passive Wealth to Active Industrial Architecture
The Gulf Cooperation Council (GCC) states accounted for 685 transactions valued at $102.1 billion, constituting approximately 96% of total MENA deal value (Source 1). The primary catalysts were the region’s sovereign wealth funds—the Public Investment Fund (PIF), the Abu Dhabi Investment Authority (ADIA), and Mubadala—operating in concert with government-related entities (GREs).
A critical insight emerges from the outbound deal data: Government-related entities accounted for 64% of total outbound deal value (Source 1). This is not portfolio diversification in the traditional sense. These transactions represent supply-chain construction, industrial adjacency acquisition, and vertical integration.
The largest single transaction of 2025 validates this thesis. OMV and Borealis acquired a 64% stake in Borouge for $16.5 billion (Source 1). This is a petrochemical vertical integration play—connecting upstream feedstock access with downstream polyethylene production capacity. It is not a passive financial asset purchase; it is an industrial architecture decision.
The second-largest deal, L’IMAD Holding Co.’s acquisition of an 84.76% stake in Modon Holding for $13.8 billion, and the third-largest, Multiply Group’s acquisition of a 42.2% stake in 2PointZero for $7.7 billion, both involve state-linked entities consolidating control over domestic infrastructure and technology platforms (Source 1). The pattern is consistent: SWFs are using M&A to build operational control, not merely financial exposure.
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Cross-Border Logic: Why 61% of Value Flowed Outside MENA
Cross-border transactions dominated the 2025 landscape, accounting for 54% of total deal volume and 61% of total deal value—exceeding $64.7 billion (Source 1). This is a structural feature, not a cyclical anomaly.
Outbound activity: MENA-based acquirers executed 256 outbound transactions (up 29% year-on-year) valued at $39.2 billion, representing 37% of total market activity (Source 1). Canada received the highest single-country outbound value at $7.1 billion, while the United States was the preferred destination by deal volume (Source 1). Combined, North America, Europe, and Asia captured 44% of cross-border deal volume and 39% of value (Source 1).
The logic is geopolitical-economic: MENA capital is pursuing assets in jurisdictions with stable legal frameworks, deep capital markets, and technology ecosystems that cannot be replicated domestically within the required timeframes.
Inbound activity: Foreign acquisitions of MENA assets accelerated sharply. Inbound deal volume rose 37% to 223 transactions, while inbound value more than doubled from $11.4 billion in 2024 to $25.4 billion in 2025 (Source 1). This two-way flow is significant. Global players are acquiring into MENA technology, real estate, and logistics assets at an accelerating rate, suggesting that foreign institutional confidence in the region’s economic trajectory is rising.
Brad Watson, EY-Parthenon MENA Leader, stated: "Governments continued to invest steadily, supported by robust economic growth, low public debt, SWF backing and broader economic diversification initiatives. Rising foreign direct investment added further momentum" (Source 2).
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Sector Deep Dive: Technology, Real Estate, and the Indian Financial Corridor
Technology and Industrial Products (38% of Volume)
The technology and diversified industrial products sector contributed 38% of total deal volume in 2025 (Source 1). This is not a speculative tech boom. The transactions are concentrated in areas where MENA economies have identified structural gaps: industrial automation, digital infrastructure, and advanced materials. The SWF approach is to acquire technology that can be deployed across domestic industrial bases—creating efficiencies that compound over time.
Real Estate and Asset Management (55% of Domestic Value)
Domestic transactions—405 deals valued at $41.6 billion—were dominated by real estate, hospitality, leisure, and asset management sectors, which together accounted for 55% of domestic deal value (Source 1). This reflects the ongoing urbanization and tourism infrastructure build-out across the GCC, particularly in Saudi Arabia and the UAE. These are long-cycle capital investments tied to national development plans (Vision 2030, UAE Centennial 2071) rather than cyclical property plays.
Banking and Capital Markets: The India Corridor
A distinct pattern emerged in financial services: banking and capital markets accounted for 14% of total outbound deal value (Source 1). The geographic concentration is notable. Three major transactions targeted Indian financial institutions:
- Emirates NBD’s $4.4 billion deal with RBL Bank
- IHC’s $1.1 billion investment in Sammaan Capital
- ADIA’s investment in IDFC FIRST Bank
(Source 1)
The strategic logic is explicit. EY noted: "The region’s banks and financial institutions are actively investing in Indian banks and non-banking financial companies, supported by India’s strong economic growth, expanding credit demand, resilient financial system and its rapidly growing base of digital users" (Source 2).
This is a calculated bet on India’s demographic dividend, digital payments infrastructure, and credit penetration gap. MENA financial institutions are acquiring distribution platforms and customer bases that would take decades to build organically.
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The Hidden Calculus: Volume Growth, Value Concentration, and Strategic Discipline
The aggregate data obscures a critical dynamic. While overall deal value rose 15%, domestic deal value surged from $24.4 billion in 2024 to $41.6 billion in 2025—a 70% increase (Source 1). This suggests that the domestic consolidation story is as significant as the cross-border narrative.
However, the domestic market is dominated by a small number of very large transactions involving government-related entities. The top three domestic deals accounted for a disproportionate share of domestic value. This is not a broad-based private sector recovery; it is state-directed consolidation of strategic assets.
The inbound surge (value more than doubling to $25.4 billion) is a more reliable indicator of genuine market confidence. Foreign acquirers lack the political imperative that drives SWF transactions. Their willingness to pay higher prices for MENA assets signals that the region’s economic fundamentals—low public debt, energy cost advantages, geographic positioning—are being priced into asset valuations.
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Forward Projections: Three Structural Trends for 2026-2027
First, SWF outbound activity will increasingly target mid-cap industrial and technology assets in Europe and North America. The petrochemical vertical integration deal (OMV/Borealis/Borouge) establishes a template. Expect similar moves in specialty chemicals, advanced manufacturing, and renewable energy components.
Second, the India-MENA financial corridor will deepen. The three major Indian bank transactions in 2025 are likely the beginning of a multi-year acquisition cycle. Indian non-banking financial companies (NBFCs) and digital lending platforms are probable targets, given MENA institutions’ need for scalable consumer finance platforms.
Third, inbound M&A into MENA will shift from real estate to technology-enabled services. The doubling of inbound value in 2025 was partly real estate-driven, but the growth rate in technology transactions suggests that foreign acquirers are pivoting toward digital infrastructure, logistics, and business process outsourcing assets.
Brad Watson summarized the operating environment: "The significant increase in M&A market activity was in spite of regional political unrest, significant global trade policy uncertainties and a once-in-a-generation technology shift" (Source 2). This resilience is not random. It reflects a deliberate, state-backed capital deployment strategy that prioritizes structural positioning over cyclical timing.
The $106.1 billion figure is not a market high-water mark. It is a directional signal—one that suggests MENA M&A will continue to grow not because of favorable conditions, but because the region’s largest capital allocators have committed to a multi-decade program of asset acquisition and industrial construction.
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Analysis based on EY-Parthenon MENA M&A Report data released February 15, 2026. Transactions referenced are publicly disclosed and verified through regulatory filings where applicable.