2025 TransAct Middle East - Mid-year Update

The financial services sector remained the most active sector in H1 2025, with deal volumes rising to about 70 in H1 2025 from 44 a year earlier. The uptick reflects structural shifts across banking, insurance, and fintech, as institutions adapt to digital disruption, capital constraints, and regulatory reform.

Fintech M&A remains a key theme, led by demand for payments infrastructure, alternative lending, and embedded finance. Egypt’s Qardy became the country’s first fintech to complete a SPAC merger, securing US$23 million from Catalyst Partners Middle East to expand its digital lending footprint⁶. Other cross-border transactions, such as Saudi-based Walaa Cooperative acquiring 88% stake in UAE’s Aspire Underwriting⁷, signal growing regional integration in the insurance segment. In banking, deal flow was more targeted. Sovereign-led reforms and internal restructuring remained visible, including Emirates NBD’s full acquisition of Emirates Islamic Bank in a US$19 million internal transaction.

Sovereign wealth funds and private equity are increasingly embedding finance into consumer tech, education, and healthcare, using financial infrastructure to drive localisation and platform consolidation.

TMT deal activity held strong in H1 2025, led by the UAE and Saudi Arabia, which together accounted for over 70% of disclosed activity. Sovereign and domestic buyers drove momentum, targeting assets aligned with AI capacity building, data centre expansion, and enterprise software. While large tech acquisitions were limited, the region’s appetite for digital economy assets continues to be shaped by localisation goals, cross-border digital integration, and increasing demand for content and connectivity.

A defining feature of 2025 was the shift from consumer-facing tech to data infrastructure plays. G42’s acquisition of a 40% stake in Khazna Data Center Holdings for US$2.2 billion was the region’s largest disclosed tech deal in H1⁸. This transaction, along with Saudi Arabia’s US$100 billion AI fund and strategic chip imports, reflects a broader strategy to control digital capacity as a long-term enabler of national competitiveness.

M&A activity in the Middle East’s EUR sector during H1 2025 continued to reflect the dual pressures of decarbonisation and demand growth, with sovereign capital actively driving the next phase of transition-aligned infrastructure. Dealmaking centred on gas distribution, pipeline infrastructure, and early-stage renewables. Recent transactions in the UAE and Saudi Arabia highlight growing investment into early-stage renewables and continued interest in well-established midstream and upstream gas assets. Lunate Capital’s investment in ADNOC Gas Pipeline Assets represents one such midstream transaction in the UAE, while Aramco’s investment in Blue Hydrogen Industrial Gases points to Saudi Arabia’s gradual expansion into low-carbon fuels under Vision 2030.⁹

More targeted moves, such as the Arab Energy Fund’s full acquisition of Metito Utilities for an undisclosed amount, signal growing interest in scalable, circular economy enablers. These deals reflect the wider role of sovereign wealth funds in financing transition infrastructure and prioritising local energy resilience, especially in water, waste, and hydrogen-linked assets.

Healthcare M&A in the Middle East held steady in H1-2025, with Saudi Arabia setting the pace as IPOs led activity and valuations stayed resilient for defensive, cash-generative operators. Two flagship listings anchored the half: Almoosa Health, raising approximately US$450m and Specialized Medical Company, raising approximately US$500m - underscoring the region’s strong demand for scaled healthcare providers. 

Sector transformation initiatives, such as Saudi’s Health Sector Transformation Program and a sustained “localise pharma” push (for example, the NUPCO/Sanofi insulin offtake), are expected to keep deal pipelines active through 2025, reinforcing healthcare as a priority investment area for both regional corporates and financial investors.

Consumer M&A in the region is split – staples remain resilient, anchored by food security priorities, while discretionary sectors surge with digitalisation and lifestyle demand.

Strategic bets like Hassana’s 40% stake in Berain Water and SALIC’s US$1.78bn Olam Agri deals¹¹ underscore national efforts to localise supply chains and secure imports.

Regional F&B leaders are expanding footprint (for example, Americana’s acquisition of 46 Pizza Hut outlets in Oman from Khimji Ramdas in January 2025)¹² while regional luxury and beauty businesses are continuously attracting capital. In March 2025, Doha Oasis bought Ever Fashion Luxury Group (26+ brand stores), and in June, Huda Kattan purchased the remaining shares in Huda Beauty to fuel regional growth - reflecting strong regional demand for fashion and beauty.

Digital marketplaces are also seeking consolidation in the digital resale space. More recently, US-based Basatne acquired UAE re-commerce player Cartlow, while the Dubizzle Group acquired Egypt’s Hatla2ee and UAE’s Property Monitor.

M&A activity in IMA remained strong in H1 2025, driven by localisation, supply chain reconfiguration, and energy-linked industrial transformation. Large-scale consolidation in steel and aluminium, including Saudi Arabian Mining Company, Ma’aden’s US$964mn acquisition of a 20.62% stake in Aluminium Bahrain¹³ signals a regional push to control key inputs across construction and energy-intensive sectors. These moves align with a broader green industrial shift, as regional strategies increasingly target hard-to-abate sectors.

There has also been active industrial development in Saudi Arabia, aligned with Vision 2030 goals to diversify the national economy. In June 2025, 83 new industrial licences were issued and 58 factories launched, valued at US$253 million, indicating the Kingdom’s rapid build-out of its manufacturing base.

Investors also pursued mid-sized transactions in cement, logistics and oilfield equipment, such as TC Mena Holdings Ltd.’s US$52.81 million acquisition of a 63% stake in Gulf Cement Co PSC in the UAE¹⁴ illustrating a preference for capability-driven acquisitions that enhance regional self-sufficiency. The surge in materials and logistics deals in Egypt, further reflects localisation efforts and infrastructure-led industrial demand.

With sovereign capital calling for greater investment into the industrial base, especially in support of decarbonisation goals, we expect more integration across energy and manufacturing ecosystems in the second half of the year.