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RIYADH: Sovereign wealth funds from the Middle East and Asia are driving a resurgence in global mergers and acquisitions, with deal volumes surpassing $3.5 trillion since the start of the year, Asharq Business reported. 

The surge marks a 34 percent increase over the previous year, putting 2025 on track to be the strongest year for M&A since 2021. The third quarter alone saw over $1.3 trillion in deals, driven by a number of mega-transactions, according to data compiled by Bloomberg. 

The flurry of activity has been led by mega-deals involving some of the world’s deepest-pocketed state-backed funds. 

On Oct. 21, Blackstone Inc. and TPG Inc. agreed to acquire medical device maker Hologic Inc. for up to $18.3 billion, including debt. The deal features the Abu Dhabi Investment Authority and Singapore’s sovereign wealth fund GIC Pte as minority investors. 

In a separate transaction last week, BlackRock Inc. partnered with MGX, an AI firm backed by Abu Dhabi’s Mubadala Investment Co., in a $40 billion deal to acquire Aligned Data Centers. 

The week prior, Carlyle Group Inc. entered a partnership with the Qatar Investment Authority to purchase the coatings unit of BASF SE in a deal that valued the unit at €7.7 billion ($8.9 billion). 

In a landmark transaction in September, ����ֱ��’s Public Investment Fund, chaired by Crown Prince Mohammed bin Salman, completed the acquisition of video game giant Electronic Arts Inc. to take it private. This leveraged buyout, valued at $55 billion, stands as the largest of its kind in history. 

Beyond participating with private equity, sovereign wealth funds are aggressively expanding their in-house investment teams to execute more direct investments. This strategy allows them to capture profits without paying fees to Wall Street banks. 

They have also become major backers of private equity funds, successfully negotiating privileges that grant them co-investment rights alongside these funds in exchange for their substantial capital commitments. 

Heavy tech and AI focus 

The technology sector has been a particular focus for these funds. In August, ADIA supported Thoma Bravo’s acquisition of HR software provider Dayforce Inc. for nearly $12 billion. 

MGX, backed by the Abu Dhabi government and overseen by Sheikh Tahnoon bin Zayed Al Nahyan, has invested in OpenAI at a $500 billion valuation. It has also supported Elon Musk’s xAI venture and plans to contribute to the “Stargate” project announced by US President Donald Trump. 

Meanwhile, Singapore’s GIC and the Qatar Investment Authority have both invested substantial capital in OpenAI’s competitor, Anthropic. 

Wall Street sees deals continuing

Senior investment bankers anticipate that the M&A wave will persist. Goldman Sachs has predicted that deal activity will accelerate by year-end, with 2026 potentially setting a new record for the M&A market. 

Sovereign funds continue to hunt for new opportunities. For instance, the asset management arm of Mubadala is reportedly considering a bid for outdoor advertising company Clear Channel Outdoor Holdings Inc., which has a market value of approximately $930 million. 

Their investment interests are also expanding beyond direct acquisitions. Qatar Investment Authority recently participated in an over $2 billion funding round for a new company founded by Hollywood super-agent Ari Emanuel, alongside other investors like Apollo Global Management and Ares Management. 

RIYADH: Arab countries attracted $122.7 billion in investments during 2024, up 53 percent from the previous year, supported by major projects in Egypt and the Gulf, new data showed. 

According to a report by the Arab Investment and Export Credit Guarantee Corp., known as Dhaman, the region saw the launch of 2,172 foreign projects with total capital expenditure of $119 billion. 

This aligns with the Arab region’s gross domestic product growth of 1.8 percent in 2024, reaching $3.6 trillion despite regional challenges, according to data released by Dhaman in March. 

It also supports Moody’s January forecast that oil production and major investment projects will drive a 0.8 percentage point rise in annual economic growth across the Middle East and North Africa in 2025. 

In its annual “Investment Climate in Arab Countries 2025” report, Dhaman said: “Despite the challenges the region experienced in 2024, FDI inflows into Arab countries rose by 53 percent to $122.7 billion, making up 14.2 percent of overall inflows into developing countries and 8.1 percent of overall world inflows worth around $1.5 trillion.” 

It added: “Foreign direct investment inflows into the Arab region continued their geographical concentration in 2024, as five countries had roughly 97 percent of the total inflows, led by Egypt, attracting $46.6 billion, making up 38 percent.” 

By the end of 2024, FDI stocks in Arab countries had increased by 8.8 percent to reach $1.2 trillion, with the UAE, ����ֱ��, and Egypt, as well as Lebanon and Oman, accounting for 73 percent of the total, the report showed. 

The Kuwait-based organization said the average ranking of Arab countries in its composite index measuring investment climate stood at 103rd globally last year, remaining below the world average. 

As for inter-Arab investment projects, the report highlighted a 17 percent decline, totaling 260 projects, while capital expenditure dropped 35 percent to $45.5 billion, representing 38 percent of the region’s total foreign direct investment.

“The UAE represented the first destination in terms of the number of projects (83 projects), while Egypt led the list in capex ($27.2 billion, making up 60 percent of the total). Business services led the list in the number of projects (77 projects), and real estate came first in the capex ($24 billion),” the report said.