H2 2025 marked a shift in dealmaking behaviour: fewer transactions, but greater conviction, as investors prioritised larger platforms over incremental or opportunistic activity. Private Equity participation rebounded in the second half of the year, reflecting improved pricing discipline, greater execution confidence, and a return to platform-building strategies.
Sovereign Wealth Funds (SWFs) remained selective but influential, concentrating on strategic transactions aligned with national transformation priorities rather than broad-based capital deployment, as reflected in recent reports of major SWFs tightening investment activity to emphasise high-impact commitments.
Market overview: fewer deals, stronger conviction
Business Services, Financial Services, TMT, and Industrials & Chemicals accounted for most deal activity in H2 2025. This reflects investors’ increasingly deliberate capital allocation toward sectors that provide operational strength and strategic scalability, a trend visible in recent reports of major funds narrowing their investment focus amid tighter liquidity and heightened selectivity. For example, Saudi Arabia’s Public Investment Fund has been reported to limit new investments to prioritise strategic commitments.
Initial Public Offering (IPO) markets across the GCC remained active and well-supported. In 2025, the Saudi Arabian IPO market continued to lead the GCC region, but it faced selective liquidity pressures, with some IPO-focused investment funds experiencing significant declines. While Saudi Arabia saw USD 4.1 billion raised through 13 IPOs on the main market (Tadawul) and 30 on the Nomu parallel market, high oversubscription in some areas contrasted with limited liquidity and negative performance for others.
Dealmaking behaviour and investor priorities
M&A activity across the Middle East in H2 2025 reflected a clear recalibration from the cautious tone observed in H1 2025. Deal volume declined from 48 transactions in H1 2025 to 44 transactions in H2 2025, representing a moderation in activity levels. In contrast, total disclosed deal value increased significantly from USD 4.7 billion to USD 5.8 billion over the same period, highlighting a decisive shift toward larger and more strategic transactions.
This divergence between volume and value signals a market increasingly focused on execution certainty, asset quality, and long-term strategic relevance. Investors demonstrated a willingness to commit capital to fewer opportunities where alignment with national priorities, sector fundamentals, and scalability was clear.
Regional activity and mid-market trends
The United Arab Emirates continued to anchor regional deal activity, accounting for a substantial share of high-value transactions, particularly in TMT, Industrials, Energy, and Financial Services. Saudi Arabia also remained a key contributor, with activity concentrated in technology, financial services, and business services platforms aligned with Vision-led initiatives. Additional notable transactions were recorded in Oman, Qatar, Bahrain, Kuwait, and Iraq, reflecting sustained cross-border interest in strategic assets across the region.
A review of the Top 20 Mid-Market transactions in H2 2025 further underscores the market’s evolution, with deal sizes clustering between USD 100 million and USD 500 million, spanning a diverse mix of sectors, geographies, and investor types. These transactions highlight the growing maturity of the region’s mid-market and its increasing comparability with developed global markets.
Mid-market resilience and key transactions
Mid-market M&A activity in the Middle East continued to demonstrate resilience despite a more volatile global backdrop. While transaction volumes moderated in H2 2025 compared to H1, total deal value increased materially, driven by a higher concentration of larger transactions. This divergence between volume and value reflects a more selective deal environment, with investors shifting toward fewer, higher-conviction opportunities rather than broad-based activity.
Some key transactions were as follows:
- SOFAZ acquired a 49% stake in Abu Dhabi Future Energy Company’s solar power portfolio (UAE, Energy, Mining & Utilities) for USD 500 million, highlighting continued investment in energy transition assets.
- International Holding Company PJSC and Alpha Dhabi Holding PJSC increased their stake in NMDC Group PJSC (UAE, Industrials & Chemicals) for approximately USD 436 million.
- Multiply Group PJSC acquired a minority stake in Ghitha Aeroinvest Holding RSC Ltd (UAE, Financial Services) for USD 390 million.
Private equity activity
Private Equity activity strengthened in H2 2025, with sponsors re-engaging in the mid-market through a higher number of transactions and increased aggregate investment value. Activity reflected improving alignment between buyer and seller expectations, alongside clearer visibility on value creation in selected sectors. Private equity interest spanned a broad range of industries, with a consistent emphasis on scalable platforms, resilient cash flows, and regional expansion potential.
Key private equity-backed transactions in H2 2025 included:
- Equipo IVI SL acquired ART Fertility Clinics’ Middle East operations for approximately USD 400 million.
- TPG Capital invested in Halalah Trading for approximately USD 157 million.
- Opportunity Venture Asia Ltd invested in Xpanceo Research for approximately USD 250 million.
- Paribu Teknoloji AS acquired CoinMENA BSC for approximately USD 240 million.
- United Gulf Holding Co BSC acquired a 49% stake in Al Rawabi United Holding Company KSCC for approximately USD 133 million.
Sovereign wealth funds
SWFs maintained an influential but measured presence in H2 2025, engaging through a limited number of strategically aligned transactions rather than broad market participation. Activity during the period was characterised by co-investment structures and a clear emphasis on long-term economic relevance over deal volume.
In 2025, Abu Dhabi's Mubadala Investment Company was the world's most active sovereign wealth fund for the second consecutive year, completing 40 transactions valued at USD 32.7 billion, heavily focused on technology, AI, and digital infrastructure.
Sovereign Wealth Fund deals included:
- Public Investment Fund (PIF)-led investment in Noon AD Holdings Ltd for approximately USD 500 million.
- Public Investment Fund (PIF) participated in Halalah Trading Co for approximately USD 157 million.
- Mubadala participated in a USD 1.3 billion investment in STT GDC in 2025.
Sector performance
The sectoral mix of Middle East mid-market activity reflects a market increasingly oriented toward future-ready platforms, with sustained participation across technology, financial services, industrials, and infrastructure-adjacent segments. Rather than being driven by a single theme, deal activity points to a broad alignment with long-term economic transformation, as capital continues to engage across sectors that support digitalisation, operational capability, and structural growth across the region.
IPO activity
IPO activity across the GCC continued in H2 2025; however, conditions in Saudi Arabia tightened noticeably toward the end of the year. Liquidity constraints and higher investor selectivity in Q4 2025 contributed to weaker retail participation in some late-year offerings, with market coverage indicating a sharp decline in retail demand in the final IPOs of the year.
Some of the notable IPOs in KSA that were cancelled in H2 2025 were Rawabi Marketing International Co. (RMI), Alwazn Almithaly, and Lavenco.
Some of the key IPOs were the following:
- Almasar Alshamil
- Cherry Trading Co.
- Consolidated Grunenfelder Saady Holding (CGS)
- Alramz Real Estate Co.
- ALEC Holdings
The 2026 outlook
H2 2025 marked a clear shift in the Middle East deal environment, with market sentiment turning more cautious toward the end of the year. Sovereign capital appears more disciplined, with market commentary and reporting pointing to more selective capital allocation by large government-linked investors. Looking ahead, these dynamics are likely to shape dealmaking behaviour across both private and public markets. Higher financing costs, more constrained liquidity, and a recalibration of government and Public Investment Fund-related spending are expected to reinforce valuation discipline and investor selectivity.
How BDO Lebanon can help
Lebanon’s M&A activity remained limited but opportunistic in H2 2025, with transactions focused on niche sectors and distressed or special situations. Investors targeted assets with turnaround potential or strong fundamentals.
BDO Lebanon advises clients on restructuring, valuation, and transaction support in complex environments, helping investors identify viable opportunities and manage risks in a challenging market context.