Middle East’s mergers and acquisitions market gears up for a strong start in 2026
Middle East’s M&A landscape advances in 2026 with a strong push following a positive start to the year, showcasing an increase in mergers and acquisitions (M&A) amid a backdrop of strategic global capital deployment, according to a recent report by PwC. The report highlighted a noteworthy 36% surge in global deal values in 2025, while deal volumes recorded a marginal 1% uptick, emphasizing a focused rather than widespread M&A activity in the region. Investors displayed a willingness to engage in deals but adopted a cautious approach, selecting transactions with lower risks.
A key trend observed throughout the year was the shift towards internal investments. Intra-regional deals climbed to a total of 320, making up about 50% of overall activity. Noteworthy investment flowed between the United Arab Emirates, Saudi Arabia, and Egypt, solidifying these countries as pivotal hubs for regional deal-making.
Companies and investors with ties to the government directed their attention to domestic markets to mitigate execution risks, as they leveraged regulatory alignment and operational familiarity to drive consolidation internally, backing national transformation objectives. In Saudi Arabia particularly, the focus has been on developing platforms, incorporating advanced capabilities, and establishing sustainable growth strategies aligned with Vision 2030. Industry leaders in the country displayed strong confidence in their domestic growth prospects.
Imad Matar, Transaction Services leader at PwC in the Middle East, noted, “In Saudi Arabia there is a deliberate focus on building platforms, embedding advanced capabilities, and anchoring long-term growth aligned with Vision 2030.” He attributed the growth to government-driven capital expenditures and regulatory reforms, which are laying the groundwork for international and local buyers to enter the market, with an increasing emphasis on investments in AI, digital infrastructure, sports, entertainment, healthcare, and clean energy.
Sovereign wealth funds have played a crucial role in supporting the regional economy by providing long-term capital needed to drive growth across key sectors. These funds globally invested $127 billion in 2025, with a notable shift towards forward-looking industries. Notably, the UAE’s Mubadala spearheaded the charge, committing $33.7 billion across 40 transactions. This sovereign activity facilitated industry convergence, particularly in energy, manufacturing, and technology, aiming to build robust national ecosystems rather than solely aiming for financial gains.
In the energy sector, investments centered on enhancing system resilience and logistics infrastructure, with significant deals like the $1.4 billion acquisition of Brooge Petroleum & Gas Investment Company fortifying control over crucial storage terminals. Technology-focused transactions prioritized artificial intelligence and digital infrastructure, showcased by the $2.2 billion investment in Khazna Data Centers, highlighting the growing importance of data infrastructure.
The industrial manufacturing sector saw continued momentum through 136 transactions aimed at localizing production and fortifying supply chains. Noteworthy deals included the acquisition of PAL Cooling Holding for $1.05 billion, bolstering the district cooling capabilities of the region. Additionally, the healthcare industry witnessed 41 deals, driven by the demand for specialized care and digital health platforms. Family-owned businesses sought capital through public listings, with Almoosa Health raising $450 million.
Looking ahead, the Middle East remains poised to maintain its competitive edge through strategic and selective deal-making, focusing on scaling domestic champions, advancing digital infrastructure, and ensuring industrial resilience. The region is expected to witness further transformative growth as AI integration with traditional sectors drives innovation and progress, solidifying its position as a resilient outlier in the global economy.