The Middle East M&A market continued to demonstrate resilience in the first half of 2026, with deal volume increasing despite geopolitical tensions, market volatility and broader economic uncertainty. While the external environment remained challenging, regional transaction activity expanded, supported by strategic investment, private equity participation and continued deployment of sovereign capital.
M&A transaction volume increased from 57 deals in H2 2025 to 67 deals in H1 2026, while aggregate deal value remained broadly stable, moving from USD 6.98 billion to USD 6.80 billion. The combination of higher deal volumes and relatively stable aggregate value points to a broader base of mid-market transactions, rather than activity being concentrated in a small number of large deals.
Private equity and sovereign capital continue to support regional dealmaking
Private equity activity strengthened further during H1 2026, with deal volume increasing from 12 to 15 transactions, the highest half-year total since H1 2022. Aggregate private equity deal value also rose from approximately USD 751.7 million to USD 996.4 million.
Investors continued to favour businesses with scalable operating models, resilient cash flows and opportunities for regional expansion. Private equity accounted for 22.4% of transactions and 14.6% of total deal value during the period, indicating that strategic buyers continued to represent the majority of regional M&A activity.
Sovereign wealth funds also remained an important source of capital. GCC sovereign wealth funds collectively committed approximately USD 53.9 billion across 108 transactions globally during H1 2026. Their investment activity continued to reflect a long-term approach to strategic sectors, economic transformation and international diversification.
Sector trends point to a broader investment landscape
Technology, Media and Telecommunications (TMT) remained the leading sector for Middle East mid-market M&A, increasing from 16 deals in H2 2025 to 18 in H1 2026. Industrials & Chemicals recorded particularly strong growth, rising from nine to 14 transactions, while Business Services increased from 10 to 11 deals.
Leisure activity also expanded significantly, increasing from two to six transactions. Meanwhile, Financial Services declined from seven to five deals and Pharma, Medical & Biotech activity fell from five transactions in H2 2025 to three in H1 2026.
The broader distribution of transactions across TMT, Industrials & Chemicals and Business Services demonstrates how investors are allocating capital towards businesses offering operational strength, scalability and long-term growth potential.
Kuwait spotlight: capital market activity continues despite a more selective environment
Kuwait remained part of the GCC capital markets landscape during a challenging period for regional IPO activity. Across the Middle East and North Africa, 10 IPOs raised approximately USD 0.8 billion in H1 2026 as geopolitical tensions, market volatility and valuation uncertainty resulted in several planned listings being delayed.
Against this backdrop, Kuwait completed the listing of Trolley General Trading Company during the period. The transaction provides an important signal of continued access to public equity markets even as overall GCC issuance slowed considerably.
For Kuwaiti businesses, investors and shareholders evaluating future transactions, the regional environment increasingly favours careful preparation, realistic valuations and a clear investment proposition. The wider Middle East trend towards mid-sized transactions also creates opportunities for businesses considering acquisitions, disposals, strategic partnerships or capital raising as part of their growth plans.
The resilience of the broader GCC transaction pipeline remains significant. While some issuers postponed transactions rather than proceeding in volatile conditions, the underlying regional IPO pipeline continues to be supported by capital market development, economic diversification and investor demand for high-quality assets.
Looking ahead
As H2 2026 progresses, investors are expected to remain selective, with greater emphasis on resilient business models, scalable operations and transactions supported by strong strategic fundamentals.
Geopolitical developments, financing costs, liquidity conditions and oil price movements may continue to affect investor sentiment and transaction timing. However, sustained strategic investment, private equity participation and sovereign capital deployment are expected to support dealmaking across the Middle East.
For companies in Kuwait, this environment reinforces the importance of transaction readiness. Businesses considering an acquisition, sale, investment or future listing should assess their strategic positioning, financial performance, valuation expectations and deal preparedness early to take advantage of opportunities as market conditions evolve.
Explore the full report
Discover the latest Middle East M&A trends, sector forecasts, private equity developments and investment insights in the full BDO Horizons 2026 Issue 2 report and explore how transaction opportunities are evolving across key regional markets and industries.