Gulf Powerhouses Compete for Capital Amid Diversification and Regional Realignment
Middle East M&A deals activity bounced back by 33% in 2025 to 635 deals corresponding to $92 billion, propelled by the ambitious diversification plans of UAE, Saudi Arabia, and Egypt. UAE accounted for 285 deals mainly in the tech and real estate sectors, whereas the projects under Saudi’s Vision 2030 attracted investment in the energy transition.
It is a major step as these countries are signaling through these investments their markets are maturing even as global capital is being repatriated.
Moodys took the lead by opening their regional headquarters in Riyadh, thereby strengthening their Middle East operations and bringing on board 200 experts to support sovereign and corporate ratings. This is a clear indication of Saudi’s move towards financial self, sufficiency whereby it aims to become a competitor with Dubai’s already established financial hubs.
Tensions between Saudi Arabia and the UAE have escalated and this has resulted in an economic tug, of, war with Riyadh’s regional HQ mandate being the main lure for $50 billion investment from tech giants such as Google, Microsoft, and Siemens that were previously anchored in Dubai. Meanwhile, the trade spats over aluminum and petrochemicals have led to the fragmentation of GCC supply chains that, although increasing the costs, have also resulted in greater intra, regional investments.
Saudi Arabia has made it compulsory for 232 companies to relocate their headquarters by June 2026, thus increasing local GDP by 2.5% through taxes and new jobs. In response, the UAE is offering golden visas and is hosting innovative events such as GITEX 2026 to attract talent. Meanwhile, the LEAP conference held in KSA has further put the country on the tech map.
GCC economies have been reaping the benefits of increased oil prices, and they are achieving a non, oil growth rate of 4.8%, for which the infrastructure mega projects have been a great B2B expansion enabler.