Rainmakers at the top investment banks say they expect the flurry of takeovers to continue
[LONDON] Deep-pocketed sovereign wealth funds are helping drive a resurgence in dealmaking that’s taken global M&A volumes past US$3.5 trillion this year.
State-backed funds from the Middle East and Asia provided firepower for some of the year’s biggest transactions. Blackstone and TPG agreed on Tuesday (Oct 21) to acquire medical-device maker Hologic for as much as US$18.3 billion including debt, with the Abu Dhabi Investment Authority (Adia) and Singapore sovereign fund GIC taking minority stakes.
Last week, BlackRock teamed up with MGX, an AI investment firm set up by Abu Dhabi’s Mubadala Investment, on a US$40 billion deal for Aligned Data Centers. The week before, Carlyle Group partnered with the Qatar Investment Authority (QIA) to buy control of BASF’s coatings business in a deal valuing the unit at 7.7 billion euros (S$11.6 billion).
It was only in September that Saudi Arabia’s sovereign fund, chaired by Crown Prince Mohammed bin Salman, agreed to take video game maker Electronic Arts private in a US$55 billion leveraged buyout, the biggest-ever.
Sovereign wealth funds have been building out their internal deal teams as they seek to do more direct investments, giving them a chance to profit without having to pay fees to Wall Street. They are also among the biggest backers of private equity funds, and have squeezed out concessions that force the buyout firms to give them opportunities to invest alongside them in return for the cash they provide.
The funds have been particularly active in tech. In August, private equity giant Thoma Bravo got backing from Adia for its roughly US$12 billion acquisition of human resources software provider Dayforce.
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Abu Dhabi’s state-backed MGX, chaired by Sheikh Tahnoon bin Zayed Al Nahyan, has invested in OpenAI at a US$500 billion valuation. It has also backed Elon Musk’s xAI and plans to contribute to US President Donald Trump’s Stargate venture. GIC and QIA have put money into rival AI startup Anthropic.
The volume of mergers and acquisitions is now up 34 per cent this year to US$3.5 trillion, putting 2025 on track to be the best year since 2021, according to data compiled by Bloomberg. More than US$1.3 trillion in transactions were recorded in the third quarter, driven by a few megadeals.
Rainmakers at the top investment banks say they expect the flurry of takeovers to continue. Goldman Sachs is predicting a major ramp up in dealmaking towards the end of the year, with a chance that 2026 proves a record year for M&A.
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Sovereign investors are on the hunt for more deals. Mubadala’s asset management arm is exploring an acquisition of Clear Channel Outdoor Holdings Inc., the billboard operator with a market value of around US$930 million, Bloomberg News reported last week.
And they are looking beyond takeovers, with the Qatari sovereign fund joining a more than US$2 billion fundraising for Hollywood superagent Ari Emanuel’s new company, alongside other investors such as Apollo Global Management and Ares Management. BLOOMBERG