16% Increase in M&A Applications Signals a Strong Q1 2025
The Saudi General Authority for Competition received 108 concentration applications in Q1 2025, marking a 16% increase from Q1 2024. This surge underscores the increasing appetite for strategic consolidation among domestic and foreign entities operating within the Kingdom. In Q1 2025, 80% of Saudi M&A transactions involved foreign entities, reinforcing the Kingdom’s global integration, while only 20% were purely domestic. Manufacturing led sectoral activity with 13 filings, followed by wholesale and retail trade (10), professional and scientific services (8), and information technology (7). These sectoral dynamics highlight the diverse drivers of Saudi M&A growth in Q1 2025, fueled by both global partnerships and local market realignment.
Conditional Approvals Return After Two Years
A key highlight in Q1 2025 was the first issuance of conditional approvals since 2023. The General Authority for Competition approved two transactions with behavioral and structural remedies, marking a shift from previous exclusivity-based commitments. Conditions ranged from price transparency and supply obligations to divestiture and compliance mechanisms, signaling a proactive approach to merger control.
This evolution in Saudi M&A growth in Q1 2025 reflects the regulator’s long-term oversight strategy, balancing competition neutrality and investor interests. Market participants should anticipate greater scrutiny, particularly in sectors demonstrating concentrated market power.
Acquisitions Dominate Saudi M&A Activity in Q1 2025
Saudi Arabia’s M&A market remained heavily driven by acquisitions, which comprised 83% of total transactions. Joint ventures accounted for 12%, while mergers represented just 3%. Agency relationships formed a marginal 1% share, reflecting continued preference for direct acquisitions over alternative collaboration models.
From a competition dynamics perspective, 62% of deals involved horizontal relationships, indicating strong consolidation trends among direct competitors. Conglomerate relationships accounted for 25%, while vertical relationships formed 14% of reviewed transactions. The overwhelming presence of horizontal transactions signals continued sector-wide realignment and market share expansions.
80% of Saudi M&A Deals Involve Foreign Entities
Foreign investment played a pivotal role in Saudi Arabia’s M&A growth in Q1 2025, with 80% of transactions involving cross-border participants. This reinforces Saudi Arabia’s increasing integration into the global M&A ecosystem, driven by investment-friendly reforms and sustained macroeconomic stability. Conversely, only 20% of deals were purely domestic, underscoring continued reliance on international investment partnerships.
Manufacturing and Retail Lead Saudi M&A Transactions
Saudi Arabia’s M&A filings in Q1 2025 were sector-diverse, with manufacturing leading at 13 transactions, followed by wholesale and retail trade (10 applications) and professional, scientific, and technical activities (8 applications). The information and communication technology sector ranked fourth with 7 filings, indicating steady expansion in digital infrastructure investments.
As Saudi M&A growth in Q1 2025 accelerates, market participants can expect ongoing interest in high-growth sectors, particularly those aligned with Vision 2030 industrial diversification strategies.
Looking Ahead: What Q2 2025 Might Bring
Given the record M&A activity in Q1 2025, Saudi Arabia’s deal-making momentum is expected to continue into Q2, supported by easing interest rates and investor-friendly policies. Sovereign wealth funds and government-linked entities remain key M&A drivers, aligning with national economic objectives.
With cross-border transactions dominating and conditional approvals increasing, Saudi Arabia’s M&A environment is becoming more complex yet more rewarding for strategic investors. Dealmakers should anticipate greater regulatory scrutiny while leveraging sector-focused opportunities for sustained market growth.
Also Read: Megadeals & Momentum: Middle East M&A Trends Surge in 2025
