A report from Ernst & Young has revealed that the United Arab Emirates (UAE) is becoming a prominent player in merger and acquisition (M&A) activities in the Middle East and North Africa (MENA) region this year, securing the top three M&A deals.
The report highlights the significant role of sovereign wealth funds, such as the Abu Dhabi Investment Authority and Mubadala Investment Company, as key drivers of M&A activity in the MENA region.
Leading the pack is the acquisition made by Austrian giant OMV and its subsidiary Borealis, which purchased a 64% stake in Borealis for $16.5 billion. This was followed by the acquisition of an 84.76% stake in ADNOC Distribution by Invest AD, owned by the Abu Dhabi Government, for $13.8 billion. The third largest deal involved Multiply Group, a holding company based in Abu Dhabi, acquiring a 42.2% stake in Two Point Zero for $7.7 billion.
The UAE topped local activity with 131 deals, supported by a favorable business environment, stable regulatory frameworks, and ongoing economic reforms. The country also maintained its position as a preferred destination for foreign investors, bolstered by growing trade volumes, strong domestic demand, and continuous diversification efforts. The technology sector, professional and services sector, and diverse industrial products were among the top sectors with the highest number of transactions this year. This momentum further solidified the UAE’s status as a leading hub for foreign direct investment in the region, accounting for 49% of total incoming deals and 92% of their overall value.
The report notes that the region experienced robust growth of 26% in M&A activity, with 884 deals recorded compared to 701 in 2024. The total deal value amounted to $106.1 billion, reflecting a 15% increase from the previous year’s $92.3 billion. Gulf Cooperation Council (GCC) countries dominated the M&A landscape during this period, contributing 685 deals valued at a total of $102.1 billion.
This expansion was primarily fueled by supportive regulatory frameworks, continued economic diversification initiatives, and a disciplined approach to deal-making. Cross-border transactions remained the main driver of M&A activity in the region, representing 54% of the total number of deals and 61% of their total value.
The banking and capital markets sector accounted for 14% of the total deal value from the MENA region in 2025. Regional banks and financial institutions continued to expand their investments in Indian banks and non-banking financial companies, supported by strong economic growth in India, increased credit demand, a robust financial system, and a growing digital user base. Noteworthy transactions included Emirates NBD’s $4.4 billion deal with RBL Bank, IHC’s $1.1 billion investment in Summit Capital, and the Abu Dhabi Investment Authority’s investment in IDFC FIRST Bank.
Brad Watson, Head of EY-Parthenon in the MENA region, commented, “The strong performance of the M&A market in 2025 underscores the resilience of the market in MENA, with both the number and value of deals rising significantly. Cross-border transactions have been the primary driver of this momentum, reflecting an increasing desire among companies to expand internationally and diversify their investment portfolios. Meanwhile, governments continued to invest at a stable pace, supported by strong economic growth, low public debt levels, and backing from sovereign wealth funds, alongside broader diversification initiatives. The increase in foreign direct investment flows has further enhanced this positive momentum.”