The first quarter of 2025 was a promising start to the year for deal flows in the UAE, with a positive transaction landscape in both value and volume across varying sectors.
There has been an upswing in both inbound and outbound mergers and acquisitions (M&A), with dealmakers particularly interested in targets in the technology, financial services, and energy sectors. This upward trajectory followed a period of contraction in broader global M&A through 2023 and 2024, affected by high interest rates and inflation, which saw overall deal volume decline.
The positive trend in deal flow has been coupled with buoyant capital markets and sustained interest in initial public offerings (IPOs) in the UAE and across the Middle East, with a pipeline of both private and state-backed candidates offering opportunities to investors to gain further exposure to the UAE market. It follows long-term strategic efforts by the UAE federal and local governments and regulatory authorities to develop domestic stock markets and implement overarching frameworks to provide certainty to investors.
Now in the second quarter, with ongoing geopolitical headwinds, the question is whether this momentum will be sustained in the year ahead?
With continued volatility in the global markets and threats of recession, the UAE is uniquely placed to navigate uncertainty. While the continuation of current economic conditions could see a negative impact on the global price of oil, the UAE’s long-term emphasis on diversification has ensured that key sectors contributing to its economy and ongoing deal flows can resist such effects. Investments in sovereign-backed infrastructure and sustainable energy projects are, for example, likely to remain largely unimpacted. Further increases in outbound M&A could be seen as sovereign wealth funds or other capital-rich investors look to maximise acquisition opportunities in undervalued targets.
Beyond this, the UAE is positioned as a global hub for technology and artificial intelligence (AI), investing significantly in incubator projects and infrastructure to attract start-ups and entrepreneurs in the AI and technology space that are leading innovation in areas such as fintech. This will provide opportunities in 2025 to a wide range of investors, in particular those tapping into the rise of the UAE’s private credit market, which is increasingly becoming a viable funding route for local small and medium enterprises (SMEs).
Overall, the strong M&A activity in the first quarter provides a positive outlook, and the UAE’s ability to maintain this momentum amid global uncertainties remains a key focus for the rest of 2025.
Abdulwahid Alulama is a partner and head of the Middle East practice at White & Case, based in the UAE. This article was first published in the May 2025 print issue of Law Middle East.
