The majority of business leaders expect a slowdown in deal activity across the Middle East, a new report has shown.
More than half (55%) of the 200 senior executives surveyed by Norton Rose Fulbright in its 2025 report, published today in collaboration with Mergermarket, believe deal activity will decrease in the region.
Just 11% of the respondents at multinational corporates, private equity firms, and investment banks, expect M&A volumes in the Middle East to increase year-on-year, while over a third (34%) believe it will stay broadly the same.
However, the report found that Middle Eastern investors are continuing to expand their global footprint, as demonstrated by the commitments made by regional investors to international deals, particularly in the US.
Pension funds and sovereign wealth funds are expected to be the most prevalent dealmakers in the region, according to the report, more so than strategic and private equity buyers.
Meanwhile, digital transformation is expected to be an especially prominent driving force behind M&A in the Middle East, with 44% of respondents identifying this among their top three sectors. Other key drivers include the disposal of non-core units (41%) and distressed opportunities (37%), while tariffs (9%) were cited as the least important driver in the report.
In terms of financing, private capital is forecast to see the greatest growth in the Middle East—more so than any region. Some 70% of respondents named private capital as one of their top two types of financing that will see the greatest increase in use in 2025.
“The versatility of private credit is one of the key drivers behind its increasing usage,” said Christopher Akinrele, a banking and finance partner at Norton Rose Fulbright. “Classically, it was used for sponsor-backed leveraged buyouts looking at cash-flow financing. But we are seeing private credit increasingly used for asset-based lending as well.”
Nearly half (47%) of respondents expect a significant rise in the use of representations & warranties (R&W) and warranty & indemnity (W&I) insurance in the Middle East—the largest of any region—with a further 30% anticipating a smaller increase.
The ever-widening net of digital regulation is expected to have the biggest impact on M&A deals in the Middle East—including rules governing cybersecurity (44%) and data protection and privacy regulations (43%).
Elsewhere, the report found the greatest obstacles to completing M&A deals in the region to be supply chain risks (58%), followed by geopolitical (49%) and local (46%) risks and uncertainties.
Earlier this year, a CMS report found the Middle East is poised for a resurgence in M&A activity, maintaining a high and stable activity level.
