Today's Edition
SARA ALZAABI (ABU DHABI)
The UAE has reinforced its position as a leading centre for mergers and acquisitions (M&A), topping the GCC with 131 completed deals worth $19.7 billion in 2024, according to the latest Marsh McLennan report on Transactional Risk Insurance.
The primary sectors driving M&A activity were technology (22%), business services (18%), industrials (15%), consumer & retail (13%), and energy and natural resources (8%).
Luke Sutton, Marsh's Head of Transactional Risk for the Middle East and Africa, highlighted key factors underpinning the UAE's strong M&A market.
"The M&A environment here is well-hedged, with government-backed initiatives in large infrastructure projects. The rapid expansion of data centres to support AI, alongside clean energy investments in solar, wind, and battery storage, reflects the scale of capital investment. Over time, sovereign players will seek to transition these assets into private markets, driving further deal activity," Sutton said.
The UAE's robust financial ecosystem, bolstered by sovereign funds, fuels substantial M&A activity both domestically and internationally.
Legal reforms and initiatives aimed at attracting foreign investment have positioned the UAE-particularly the Dubai International Financial Centre (DIFC)-as a burgeoning global hub for private equity and corporate transactions.
According to Sutton, there is growing demand for M&A risk insurance in the UAE.
"Competition among insurers is at an all-time high, driving innovation. Insurers are eager to deploy capital, create strategic partnerships with sovereigns, and gain exposure to regional transactions. As a result, premium rates have dropped significantly, and coverage scope has expanded. Diligence providers and deal professionals are more aware of available insurance products, making transactions smoother and more attractive to bidders," he said.
A 78% increase in demand for M&A insurance indicates the growing maturity of transactions in the region. The insurance market has adapted to evolving trends in deal-making.
"Unlike a few years ago, when sectors like oil and gas faced limited insurance capacity, we now see solutions across all industries. Whether a deal is valued at $10 million or tens of billions, there is an insurance partner suited for it. The market caters to SMEs, large-cap transactions, real estate, and infrastructure, ensuring that every deal finds the right coverage," Sutton added.
Sovereign wealth funds have emerged as key players in M&A activity.
"They spearhead economic growth and investment, forming strategic partnerships with the private sector and expanding globally. While they have historically dominated, we are also seeing the rise of domestic private equity firms and corporates pursuing aggressive expansion through acquisitions. The M&A ecosystem is diversifying, with new sources of capital fuelling market dynamics."
Another significant growth driver is economic diversification. "Regulatory shifts and government-led initiatives have transformed the UAE into a hub for foreign direct investment," Sutton said.
Technology, AI, renewable energy, and healthcare are key sectors experiencing exponential growth. "The influx of private capital, coupled with strategic partnerships, has created a vibrant, forward-looking business landscape. Free zones like DIFC and Abu Dhabi Global Market (ADGM) are further enhancing the UAE's appeal," he added.
Sutton remains optimistic about the future of M&A in the UAE, citing strong government support, strategic capital, and evolving risk management systems.
