Middle East

What you need to know

• Resilient market: M&A in the Middle East has remained resilient in 2026, with geopolitical uncertainty reshaping the Middle East M&A market, rather than bringing it to a standstill.
• More deals, lower value: H1 2026 saw 146 announced Gulf Cooperation Council (GCC) target-side deals worth US$19.02 billion. Volume rose modestly from 139 deals in H1 2025, but value declined significantly from US$43.97 billion in H2 2025.
• Strategic sectors focus: Regional M&A activity has sharply refocused on strategically important sectors, with continued domestic and international investment in the energy, infrastructure and technology sectors.
• Sovereign-led consolidation: Sovereign led transactions have dominated domestic activity, consolidating ownership and control of strategic assets and fuelling growth in key domestic sectors such as real estate.
• Energy and real estate dominate: Energy & Natural Resources (US$7.18 billion, 38%) and Real Estate (US$6.89 billion, 36%) together accounted for approximately 74% of GCC deal value in H1 2026.
• Active outbound investors: GCC-based acquirers remained highly active outbound, co-investing with leading sponsors in some of 2026's largest take-privates.

The M&A state of play

M&A activity across the six GCC markets - UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman - remained resilient in 2026, against a backdrop of regional conflict and heightened geopolitical uncertainty.

There were 146 announced GCC target-side deals, up modestly from 139 in H1 2025. Aggregate deal value, however, fell to US$19.02 billion, well below the US$43.97 billion recorded in H2 2025. The divergence between volume and value points to an active market with the largest transactions increasingly concentrated among state-backed buyers and strategic assets.

Strategic sectors in focus

The geopolitical uncertainty caused the market to quickly adapt, sharply refocusing on core strategic sectors – energy, infrastructure and technology. Other industries critical to self-sufficiency, strategic security and broader economic diversification objectives, such as defence, healthcare and manufacturing, continue to attract capital from domestic and less risk averse international investors.

Energy & Natural Resources generated US$7.18 billion, or 38% of GCC deal value, while Real Estate generated US$6.89 billion, or 36%. Together, the two sectors represented approximately 74% of total value. Industrials recorded 27 deals and Consumer & Retail 24, demonstrating steady activity beyond the headline sovereign transactions.

Capital intensive energy and infrastructure assets, in particular for new hydrocarbon export routes and related infrastructure, as well as to meet broader development, self-sufficiency and diversification objectives, will continue to attract foreign capital and strategic joint ventures between SOEs and international partners. International investors who understand the region and the nature of its risks will find opportunities to entrench regional footprints, consolidate fragmented sectors, and deepen partnerships with SOEs.

Sovereigns continue to drive transformational domestic activity

Sovereign entities drove regional M&A activity, consolidating ownership and control of strategic assets. The UAE's evolving sovereign architecture was reflected in the three largest GCC target transactions in H1 2026:

• Dubai Holding’s acquisition of a 22.27% interest in Emaar Properties for US$6.62 billion;
• L'IMAD's acquisition of a further 8.09% shareholding in TAQA, Abu Dhabi's national energy company, from 2PointZero and other minority shareholders for US$5.89 billion. L'IMAD has since acquired the remaining minority shareholdings and is pursuing TAQA's delisting from the ADX, one of the Emirates' most strategically important energy and utilities businesses; and
• Dubai Electricity and Water Authority's acquisition of a further 25% stake in Emirates Central Cooling Systems Corporation (Emcool) for US$1.41 billion.

We expect this trend to continue, as state ownership of strategic energy, utilities and infrastructure assets is reallocated and portfolios are rebalanced.

SOEs have also continued to attract foreign direct investment. Defying concerns about institutional investment in oil related assets and vulnerability to geopolitical risk, Kuwait Oil Company attracted a US$16 billion investment from Blackstone, Brookfield and KKR in its crude oil pipeline network. The transaction, which replicated ADNOC's transaction with BlackRock and KKR in 2019, and Saudi Aramco's with EIG in 2021, revealed the level of comfort that these institutional investors have built from their time in the region and the attractiveness of consistent oil linked returns involving critical state assets.

The top 10 publicly disclosed GCC M&A deals announced in H1 2026 are as follows:

Source: Mergermarket

Outbound sovereign capital flows unaffected

The long-term investment horizons, deep capital pools, and alignment with broader economic diversification strategies, left the GCC SWFs undeterred by the conflict. Their established co-investment relationships with global private equity firms were evident in these market defining deals:

• The acquisition by Saudi Arabia's Public Investment Fund, together with Silver Lake and Affinity Partners, of Electronic Arts for approximately US$55 billion. The deal, which completed in August 2026, represents one of the largest take-private transactions ever.
• Teaming up with EQT, UAE SWFs Abu Dhabi Investment Authority and Mubadala will hold a combined 24% stake in Intertek plc, the UK listed testing, inspection and certification group. With a total value of approximately £10.9bn, the deal is the largest UK take-private of 2026. ADIA is also an investor in the consortium led by CVC Capital Partners and Groupe Bruxelles Lambert seeking to take Italian pharmaceutical company Recordati private for approximately €10.7bn.
• Qatar Investment Authority participated in a GIP/EQT led consortium for the US$38.36 billion acquisition of AES Corp.

Dubai Aerospace Enterprises also completed its US$9 billion acquisition of Macquarie Airfinance in July 2026. And Abu Dhabi SWFs Mubadala and MGX continued to invest in high-profile technology companies, including OpenAI, Anthropic, xAI and Waymo.

National oil companies in the region also continued executing their plans to build global platforms, particularly in LNG. Notably, in June 2026, ADNOC's international investment platform, XRG, announced its acquisition together with Eni of a 32% interest in three upstream blocks in Argentina to support their US$51 billion Argentina LNG project with YPF.

Outbound investment should remain steady, with GCC sovereign wealth funds and SOEs deploying substantial capital across the US, Europe and Asia to build global portfolios and diversify risk.

Private equity – cautious but evident

Inbound activity from non-GCC acquirers fell materially, with disclosed value in Q1 2026 at US$3.6 billion compared with US$18.1 billion in Q1 2025. Nonetheless, 2026 has seem some major non-sovereign back deals in the GGC, including:

• Blackstone's US$250 million investment in Advanced Digital Gaming Technology, a newly established UAE-based payments and data-intelligence platform, the first PE-backed inbound Gulf transaction following the outbreak of the Iran conflict;
• Investcorp's acquisition of a strategic stake in Metra, a UAE-headquartered value-added IT distributor, in June 2026 for an undisclosed amount; and
• Private UAE developer Arada acquired more than 80% of Abu Dhabi's Reem Hospital, from a consortium including Investcorp and other shareholders.

International and GCC based PE investors remain selective and reluctant to deploy at scale while geopolitical and exit conditions remain unsettled.