Mergers and acquisitions deal values across the Gulf surged in 2025, defying a sluggish global market as the UAE cemented its status as the region’s dominant dealmaking hub, buoyed by sovereign wealth firepower, record foreign investment inflows and a wave of billion-dollar strategic transactions.
A new report by Marsh McLennan showed that M&A activity across the Middle East and Africa expanded strongly last year, driven primarily by GCC economies, with the UAE emerging as one of the region’s clear frontrunners in high-value transactions spanning technology, infrastructure, energy transition, real estate and financial services.
The report highlighted that the Middle East continued to attract strong domestic, inbound and outbound deal activity even as global markets grappled with elevated interest rates, geopolitical tensions and tighter financing conditions. Median deal sizes across the region climbed to $390 million in 2025, while several transactions ranged between $1.5 billion and $2.5 billion, reflecting growing investor appetite for large-scale strategic acquisitions.
Analysts said the UAE’s expanding role in global M&A flows is being powered by deep sovereign liquidity, business-friendly reforms and aggressive economic diversification strategies that are transforming the country into a major global capital, technology and investment hub.
The Gulf’s dealmaking momentum also comes as the region attracts rising international capital flows and record levels of foreign direct investment. According to UNCTAD and regional investment data, the UAE remained the Arab world’s largest FDI destination, attracting more than $30 billion in inflows in recent years while maintaining its position among the world’s leading greenfield investment markets.
The Marsh report said more than 100 warranty and indemnity (W&I) insurance inquiries were recorded across the Middle East and Africa during 2025, reflecting the growing sophistication and scale of regional transactions.
Domestic deals accounted for 44 per cent of transactions placed, while outbound acquisitions represented 32 per cent and inbound deals 24 per cent, underlining the increasingly international nature of Gulf dealmaking.
Nirav Modi, private equity and M&A leader, Middle East and Africa at Marsh, said transactional risk insurance was becoming an increasingly important enabler for complex regional deals.
“Marsh’s 2025 data highlights how transactional risk solutions are becoming a key enabler of deal activity across the region,” he said.
“The UAE stands out with a strong and diversified pipeline of opportunities spanning sectors such as technology, infrastructure, energy transition and financial services, underpinned by its clear strategic growth agenda.”
He said the Middle East remained highly competitive for dealmakers despite a global rise in insurance pricing.
“While pricing has risen in many global markets, the Middle East remains attractively priced, positioning warranty and indemnity insurance as a practical tool for cleaner execution, more efficient risk allocation and greater certainty in increasingly complex transactions,” Modi added.
Globally, transactional risk insurance pricing increased sharply in 2025, rising 16 per cent in North America, 5 per cent in Europe and 8 per cent in Asia. In contrast, the Middle East maintained historically low premium rates, strengthening its attractiveness for strategic investors and private equity firms seeking efficient deal execution.
The report said strategic buyers accounted for 61 per cent of transactional risk insurance usage in the Middle East compared with 39 per cent for financial buyers, reflecting the dominant role played by sovereign wealth funds, state-backed entities and regional corporates in driving acquisitions.
The UAE’s major sovereign investors — including Abu Dhabi Investment Authority, Mubadala Investment Company and ADQ — have continued expanding globally through multi-billion-dollar investments in infrastructure, artificial intelligence, energy transition, logistics and digital assets.
Recent years have also witnessed a wave of high-profile IPOs and strategic transactions involving UAE-linked entities such as Adnoc Gas, Dubai Electricity and Water Authority and Borouge, further deepening regional capital markets and boosting investor confidence.
Consultants said the GCC’s expanding role in global M&A activity is also being fuelled by regulatory reforms, business-friendly policies and the rapid expansion of sectors linked to digital transformation and clean energy.
The report identified energy transition, advanced technology, real estate and the digital economy among the sectors expected to remain highly active in 2026, while outbound investment from Gulf sovereign and corporate investors is projected to stay robust.
However, Marsh cautioned that geopolitical tensions linked to the Iran conflict and broader regional instability could create near-term uncertainty for deal activity this year.
Analysts believe the UAE and wider GCC remain well positioned to sustain strong M&A momentum due to abundant liquidity, resilient economic growth and continuing efforts to diversify beyond hydrocarbons.
