Mergers and acquisitions (M&A) have been a defining feature of the GCC for some time now. With regional economic diversification fuelling a surge in all kinds of business, the first half of 2025 has been an exceptionally exciting period for M&A, highlighted by numerous high-profile deals.
Looking at figures from the MENA region (which includes the six GCC countries alongside another 11 nations), M&A activity surged in Q1 2025, with deal volume rising 31% year-on-year. During this period, 225 deals were completed, totalling USD 46 billion in value. These figures are from a study by consulting firm EY, which noted that cross-border transactions were the main driver, accounting for 117 deals worth USD 37.3bn. When we look at individual countries, the UAE was the top target market in the MENA region, with 63 deals totalling USD 20.3bn.
This article examines some of the most recent M&A deals and explains how the GCC has become a fertile ground for this type of activity, noting the associated risks and highlighting who stands to benefit.
A surge in GCC M&A activity
M&A activity in 2025 so far has already been setting records.
One of the big headline-grabbing moments was when Abu Dhabi-based Multiply Group made its USD 1.5 billion acquisition of a majority stake in Spanish fashion retailer Tendam. In other GCC-Europe news, Qatari firm Al Mahhar Holding finalised its full acquisition of European Equipment Company (EEC) by securing the remaining 49% stake for over USD 1 million.
Elsewhere in the UAE, Al-Futtaim is set to acquire a 49.95% stake in Saudi-based Cenomi Retail in a deal valued at over USD 667 million. Then there was the most significant deal so far this year – the massive USD 16.5 billion transaction between Abu Dhabi National Oil Company (Adnoc) and Austrian energy group OMV to merge the two petrochemical firms Borouge and Borealis.
The role of strategic restructuring
What’s behind the GCC’s M&A surge? Like most things in the Gulf, it’s no accident. The groundwork has been laid through clear, strategic thinking and the kind of forward-planning that looks decades ahead.
Governments in our region, particularly those in Saudi Arabia and the UAE, have made significant efforts to diversify their economies and reduce their dependence on oil. To that end, they have used sovereign wealth funds (SWFs) to invest billions of dollars into sectors that are aligned with their national visions, often in areas related to sustainability, tourism, healthcare, and technology, as well as others. This government-led activity exists alongside a number of private sector players eager to position themselves for international expansion.
The economic rationale behind GCC M&As
Each M&A deal is unique, but there are some common threads. Whether it’s about growth or becoming more efficient, or expanding into new markets, the deals offer companies an opportunity to reposition themselves, strengthen their competitive edge, and align more closely with the region’s evolving economic priorities.
Let’s look at these in more detail:
- Scale and efficiency: Growth is clearly the most common driver of M&A. When you merge with (or acquire) a competitor, your organisation can streamline operations and even negotiate better supplier terms.
- Market entry and expansion: M&A offers GCC firms the opportunity to move faster than organic growth would allow by entering new markets. Expanding through dealmaking is often quicker and not as risky.
- Talent and tech: As many countries in the region increasingly focus on becoming knowledge economies, M&A can be a shortcut to innovation. Acquiring a startup with proven expertise allows legacy firms to modernise far more rapidly than would be possible with just in-house development.
- Succession and exit: Many GCC SMEs are family-owned. M&A offers a practical path for succession planning, especially when younger generations are less involved. Meanwhile, entrepreneurs who have built high-growth ventures see M&A as a viable exit route.
- Investors: M&A is being used to rebalance portfolios, hedge risks, and enter high-growth sectors such as fintech, agritech, and renewable energy.
The benefits and risks of the GCC M&A boom
Family-run enterprises are the traditional backbone of many GCC economies, and those that are open to acquisition or merger could unlock new growth opportunities. Meanwhile, some companies are taking the lead themselves and acquiring smaller firms to help their own long-term prospects.
When we look at startups, founders who have built successful businesses in tech, healthcare, education, or logistics are already in a strong position. Meanwhile, private equity firms benefit from relatively few regulatory hurdles, ample capital, and ambitious national agendas they can align with.
Finally, large enterprises aiming to future-proof their operations are also benefiting. By acquiring innovative startups or merging with complementary businesses, they’re future-proofing their business and building greater resilience into their supply chains.
Of course, M&A in the region isn’t without its challenges. There is always the risk of overvaluation in popular sectors like fintech and healthcare, as well as considerable variation between regulatory frameworks across the region. Making things work during cross-border mergers can also have its obstacles. So, businesses need to remain diligent in assessing the financials and the strategic fit.
What this means for the future of M&A
The GCC’s M&A boom is set to continue, driven by cross-border deals, outbound acquisitions, major transactions led by SWFs, and smaller deals involving startups and scale-ups as targets and potential buyers.
Even a quick glance at the objectives outlined in the major visions the GCC countries have issued over the past decade or so shows how central sustainability is for their future. These programmes include Saudi Arabia’s Vision 2030, the UAE’s Vision 2031, Qatar National Vision 2030, Kuwait Vision 2035, Oman Vision 2040, and Bahrain Economic Vision 2030. For investors or entrepreneurs, aligning with the goals outlined in these long-term strategies will have a significant impact on how deals are evaluated. M&A is playing an increasingly central role in making economies more diverse and resilient, as well as being a driver for growth.
So, based on the first half of 2025 and moving forward, the GCC’s M&A landscape, fuelled by economic reform and global ambition, offers an exciting and dynamic environment for entrepreneurs and investors.
