RIYADH: Mergers and acquisitions in the Middle East and North Africa region reached $115.5 billion in the first half of 2025, marking a 149 percent increase over the same period last year. 

The London Stock Exchange Group said in its latest report that this marks the highest first-half total since it began tracking the data in 1980, highlighting the region’s resilience amid global economic headwinds. 

Deal volumes in the region also climbed 16 percent year on year, reaching the highest level in three years, the report noted.  

The sharp uptick signals robust investor appetite despite macroeconomic uncertainty and builds on a solid 2024 performance, when MENA M&A deals rose 7 percent to $92.3 billion. 

In February, US-based investment bank Morgan Stanley described the momentum as a “structural upswing” in deal volume and value, driven by regulatory reforms and strategic policy shifts across the region. 

“Deals involving a MENA target reached $48.0 billion, 18 percent more than the value recorded last year at this time and a level only exceeded once before, in 2019 when Saudi Aramco acquired a majority stake in SABIC,” LSEG said.   

The analysis revealed that outbound M&A reached $64.5 billion, an all-time first-half record, while the number of outbound deals rose 8 percent. 

The largest deal announced so far this year is Borealis AG’s $30.85 billion acquisition of Borouge PLC in the UAE, which is currently pending completion. 

UAE and Saudi lead activity 

The UAE was the top target country, drawing $39.8 billion in M&A inflows, followed by Saudi Arabia at $3.5 billion.  

Earlier this year, global consulting firm EY said the two countries accounted for 318 M&A deals in 2024, worth $29.6 billion combined, citing improved capital markets, international investor interest, and regulatory liberalization as primary drivers. 

In a sign of continued M&A momentum in Saudi Arabia, the General Authority for Competition approved a record 202 economic concentration requests in January, reflecting the Kingdom’s efforts to strengthen its competitive business environment. 

Economic concentration approvals are required for mergers and acquisitions to ensure they do not create monopolies or disrupt market competition. 

Sectoral breakdown 

The materials sector dominated MENA-targeted M&A activity by value in the first half of the year, accounting for 67 percent of total deal value at $32.1 billion, largely driven by the UAE's ADNOC-OMV merger involving Borouge and Borealis, according to the latest LSEG report. 

The financial sector followed with deals worth $3.3 billion, while the consumer products and services sector recorded $2.9 billion in transactions. The high technology and industrials sectors saw activity totaling $2.6 billion and $2.3 billion, respectively. 

M&A in the energy and power sector reached $2.2 billion during the same period. 

London-based financial services group Rothschild led the MENA financial adviser league table for announced M&A deals in the first half, advising on transactions worth a combined $76.1 billion. 

Equity capital markets  

Equity and equity-related issuance in the MENA region totaled $7.6 billion in the first six months of the year, representing a 57 percent decline in value compared to the same period in the previous year.  

Initial public offerings accounted for 59 percent of the total, while follow-on issuances made up the remaining 41 percent. 

A total of 25 IPOs were recorded — two more than during the same period in 2024 — marking the highest such tally since 2008. 
Collectively, these IPOs raised $4.5 billion, representing a 25 percent rise compared to the previous year.  

“Low-cost airline flynas raised $1.1 billion in its stock market debut on Saudi Arabia’s main Tadawul exchange in May, the largest IPO in the region so far this year,” said LSEG.  

A June report by Forbes Middle East said that Saudi Arabia’s equity capital market maintained strong momentum in the first half, with six companies raising a combined $2.8 billion through initial public offerings on Tadawul. 

The rise in the Kingdom’s IPO pipeline aligns with broader financial reforms, as the Capital Market Authority has introduced new frameworks, including regulations for special purpose acquisition companies, to expand funding avenues and enhance private sector participation. 

The LSEG report said proceeds raised from follow-on offerings reached $3.1 billion during the first quarter, largely boosted by Abu Dhabi's ADNOC Gas’s $2.8 billion share sale in February. 

The energy and power sector led activity, with issuers raising a combined $2.8 billion, accounting for 38 percent of total equity capital raised in the region, followed by the real estate sector at 20 percent. 

HSBC topped the MENA equity capital markets underwriting league table for the first half, with a 15 percent market share, followed by EFG Hermes at 11 percent. 

Debt capital markets  

MENA bond issuance totaled $86.8 billion in the first half, representing a 17 percent increase over the same period last year and marking the highest first-half total since 1980. 

The number of bond issues also rose 17 percent year on year, surpassing all previous first-half records. 

Saudi Arabia was the most active issuer, accounting for 52 percent of total bond proceeds, followed by the UAE at 25 percent, and Qatar at 8 percent.

Earlier this month, a report by S&P Global said Saudi Arabia’s domestic corporate bond and sukuk markets are poised for further growth, driven by Vision 2030 investments and ongoing regulatory reforms. 

In April, Fitch Ratings reported that Saudi Arabia’s debt capital market reached $465.8 billion by the end of March, a 16 percent year-on-year increase, with sukuk making up 60.4 percent of the total. 

The Kingdom’s debt market is expected to surpass $500 billion in outstanding value by the end of 2025, supported by strong economic fundamentals, diversified funding strategies, and continued progress under Vision 2030. 

LSEG also said Islamic bonds in the region raised $32.2 billion in the first half — an all-time record for the period — representing a 14 percent increase over last year. 

Sukuk accounted for 37 percent of total bond proceeds raised in the region, slightly down from 38 percent during the same period in 2024. 

HSBC led the MENA bond bookrunner rankings, handling $8.9 billion in proceeds, or a 10 percent market share in the first half. 

Investment banking fees 

LSEG estimated that $773.7 million in investment banking fees were generated in the MENA region, a 2 percent decline from the same period in 2024, but still the third-highest first-half total since 2000. 

Debt capital markets underwriting fees rose 20 percent year on year to $278.9 million in the first six months. 

However, equity market underwriting fees dropped to a two-year low of $169.9 million, reflecting an 18 percent year-on-year decline. 

“Advisory fees earned from completed M&A transactions totalled $191 million, 52 percent more than the value registered last year at this time and the highest first-half total since 2022,” said LSEG.

According to the report, Saudi Arabia accounted for 41 percent of all MENA investment banking fees, followed by the UAE at 35 percent, and Qatar at 7 percent. 

HSBC earned the most investment banking fees in the region, collecting $64 million, or an 8 percent share of the total fee pool.