Key Takeaways
- • GCC M&A deal value reached USD72.7 billion across 554 transactions through December 1, 2025, up 170% in value and 2.6% in count versus full-year 2024, according to A&O Shearman.
- • The UAE (USD60.4bn) and Saudi Arabia (USD8bn) were the two largest markets, with both recording higher deal value in Q4 2025 than in Q3.
- • Saudi Arabia's Public Investment Fund (PIF) led the highest-profile sovereign wealth fund deal of 2025: a USD55bn acquisition of Electronic Arts alongside Silver Lake and Affinity Partners.
- • Sovereign wealth funds are shifting toward control positions and anchor roles in private equity and private credit, while U.S. policy changes have opened access to advanced U.S. AI and semiconductor technology in exchange for investment in U.S. priority sectors.
- • Gulf IPO markets remained active, with 11 listings in Q3 2025, eight of them on the Tadawul, and A&O Shearman expects a strong 2026 driven by PIF exits and family business flotations.
Summary
According to A&O Shearman, mergers and acquisitions within the Gulf Cooperation Council (GCC) defied the global downturn in 2025. Deal value reached USD72.7 billion across 554 transactions through December 1, up 170% and 2.6% respectively from the 2024 totals. The UAE led with USD60.4 billion, followed by Saudi Arabia with USD8 billion, and both markets recorded higher deal value in Q4 2025 than in the prior quarter. Major inbound transactions included Aramco's USD11 billion lease and leaseback of its Jafurah gas processing business to a consortium led by Global Infrastructure Partners. Financial services also saw in-market consolidation, including the combination of Gulf Bank and Warba Bank in Kuwait.
Sovereign wealth funds (SWFs) were among the most active cross-border investors in 2025. The report attributes their outbound activity to national objectives, including economic diversification away from fossil fuels, scaling domestic or regional champions, strengthening international alliances, and investing in future industries. The firm notes that SWFs are increasingly taking control positions rather than passive minority stakes, and that international private equity and private credit funds are expanding in the region with SWF anchor investments. The largest transaction was PIF's USD55 billion acquisition of Electronic Arts alongside Silver Lake and Affinity Partners, the investment company founded by Jared Kushner.
The report links this activity to shifting U.S. policy under the Trump administration, which has sought partnerships with Gulf governments across real estate and M&A. These arrangements have given Middle Eastern governments access to U.S. AI and semiconductor technology in exchange for investment in 'America First' sectors such as data centers, energy and manufacturing. A&O Shearman notes the rescission of the Biden-era AI Diffusion Rule. During a November White House visit, Saudi Crown Prince Mohammed bin Salman pledged an additional USD400 billion of investment on top of USD600 billion promised earlier in the year, and the two countries signed nuclear energy, critical minerals and AI agreements. Gulf governments are also pursuing deals in China and maintaining investment flows with India and Africa.
Domestically, state-affiliated vehicles are investing heavily in AI and data infrastructure. Saudi Arabia's Humain, launched in May 2025 and backed by PIF, plans up to 6GW of data center capacity by 2034 with partners including Nvidia, AMD, Qualcomm and Cisco, and announced a USD3 billion domestic data center deal with Blackstone in November. The UAE's MGX is an AI-focused fund. Regional venture activity is also expanding, with Qatar signaling plans to invest over USD1 billion in local VCs.
IPO markets also performed well. The region recorded 11 listings in Q3 2025, raising USD1.21 trillion according to the report (figure as published), with eight on the Tadawul raising USD637 million. A&O Shearman expects another strong year in 2026, driven by PIF exits, scaled private company listings and family business flotations.
Sovereign wealth funds (SWFs) were among the most active cross-border investors in 2025. The report attributes their outbound activity to national objectives, including economic diversification away from fossil fuels, scaling domestic or regional champions, strengthening international alliances, and investing in future industries. The firm notes that SWFs are increasingly taking control positions rather than passive minority stakes, and that international private equity and private credit funds are expanding in the region with SWF anchor investments. The largest transaction was PIF's USD55 billion acquisition of Electronic Arts alongside Silver Lake and Affinity Partners, the investment company founded by Jared Kushner.
The report links this activity to shifting U.S. policy under the Trump administration, which has sought partnerships with Gulf governments across real estate and M&A. These arrangements have given Middle Eastern governments access to U.S. AI and semiconductor technology in exchange for investment in 'America First' sectors such as data centers, energy and manufacturing. A&O Shearman notes the rescission of the Biden-era AI Diffusion Rule. During a November White House visit, Saudi Crown Prince Mohammed bin Salman pledged an additional USD400 billion of investment on top of USD600 billion promised earlier in the year, and the two countries signed nuclear energy, critical minerals and AI agreements. Gulf governments are also pursuing deals in China and maintaining investment flows with India and Africa.
Domestically, state-affiliated vehicles are investing heavily in AI and data infrastructure. Saudi Arabia's Humain, launched in May 2025 and backed by PIF, plans up to 6GW of data center capacity by 2034 with partners including Nvidia, AMD, Qualcomm and Cisco, and announced a USD3 billion domestic data center deal with Blackstone in November. The UAE's MGX is an AI-focused fund. Regional venture activity is also expanding, with Qatar signaling plans to invest over USD1 billion in local VCs.
IPO markets also performed well. The region recorded 11 listings in Q3 2025, raising USD1.21 trillion according to the report (figure as published), with eight on the Tadawul raising USD637 million. A&O Shearman expects another strong year in 2026, driven by PIF exits, scaled private company listings and family business flotations.
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