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, Ƶ’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.
