Goldman Sachs anticipates a sector-level shift in Middle East and North Africa (MENA) dealmaking as regional players adapt to the ongoing US/Israel–Iran conflict. Data from LSEG reveals a sharp contraction in the market, with overall M&A involvement falling 74% year-on-year to $18.8 billion in the first quarter of 2026. Domestic target deals were particularly hard hit, plummeting 90% to their lowest first-quarter levels in ten years.
Despite the downturn, Jassim AlSane of Goldman Sachs suggests that it is premature to view these numbers as a permanent trend, noting that the economic fundamentals of the Gulf Cooperation Council (GCC) remain strong. Investors are currently prioritizing industries that offer supply chain resilience, security, and protection against inflation. Goldman Sachs itself remained a top player during this period, capturing over 15% of the market share through high-profile transactions like the $6 billion acquisition of gaming studio Moonton by Saudi Arabia’s Savvy Games Group.
Strategic consolidation and capital rotation have pushed sectors like gaming, aircraft leasing, and heavy industry to the forefront. Notable examples include Bahrain-based Alba’s $2.2 billion purchase of Europe’s largest aluminum smelter and Qatar’s Lesha Bank acquiring assets from a German aircraft-leasing firm. AlSane notes that much of this activity is spearheaded by sovereign-backed “national champions” executing long-term growth mandates.
While outbound M&A from the MENA region hit a two-year low at $11.5 billion, it continues to outpace internal regional activity as strategic players pursue global expansion. Although some analysts fear a prolonged conflict could further stifle the market, AlSane remains optimistic. He indicates that Goldman Sachs’ current pipeline includes numerous deals proceeding as scheduled, suggesting that geopolitical volatility has not fundamentally derailed the region’s long-term investment strategy.
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