A United Arab Emirates-based school operator is in advanced talks to buy Saudi Arabia’s Ajialuna Educational Co., according to people familiar with the matter, a sign that Gulf dealmaking is continuing despite the regional war.

Alephya, majority-owned by private equity firm TA Associates, is looking to acquire a controlling stake in the Saudi company, the people said, requesting anonymity to discuss private information. The Riyadh-based firm could be valued at as much as $500 million, some of the people said.

The negotiations to buy Sulaiman Alrajhi Holding’s stake in Ajialuna are at an advanced stage, but a final decision has yet to be made, the people said.

GEMS Education, the Dubai-based education provider backed by Brookfield Asset Management, had also shown interest in Ajialuna, Bloomberg News reported last year.

Representatives for Alephya, Ajialuna and Sulaiman Alrajhi did not respond to requests for comment. TA Associates and GEMS Education declined to comment.

The potential transaction underscores the continued pace of dealmaking in the Gulf despite disruptions from the US-Iran war, now in its eighth month. State-backed investors in the Middle East and North Africa have deployed $102 billion this year and are on track for their second-best year of dealmaking, according to Global SWF.

Still, Saudi Arabian cities and energy sites have come under regular Houthi attacks in recent weeks. The Saudi-led coalition in Yemen launched an operation Sunday to recapture Houthi-held territory, with clashes since intensifying near the Bab el-Mandeb strait, an alternative to the crucial Hormuz waterway.

The fighting opens another front in the broader war with Iran, though the Trump administration is reluctant to deepen its involvement in the Saudi offensive against the Houthis.

The cross-border deal talks also come after lingering tensions between the UAE and Saudi Arabia raised concerns on Wall Street about potential disruption to investment flows between the closely linked Gulf economies. There were signs of a rapprochement in September, when UAE Vice President Sheikh Mansour bin Zayed Al Nahyan met Saudi Crown Prince Mohammed bin Salman in the first public visit by a senior Emirati official to the kingdom this year.

Education is seen as a defensive sector in the Gulf despite the regional war, particularly in Saudi Arabia, which has a population of around 35 million. About 20 million are citizens, while the kingdom has been trying to attract more expatriates under its Vision 2030 agenda to diversify the economy.

Since foreign ownership rules were eased in 2017, international and regional school brands have been opening branches across the kingdom. At the same time, more Saudi students are enrolling in international schools as part of government efforts to improve access and close the skills gap.

Even in expat-heavy Dubai, GEMS and Taaleem Holdings PSC have reported resilient enrollment in September, after the UAE successfully fended off thousands of projectiles from Iran in the early phase of the conflict.

Ajialuna operates 10 private and international schools serving more than 17,000 students across Saudi Arabia, from kindergarten through high school.

Alephya runs 15 schools in the Gulf Cooperation Council region, catering to over 20,000 students, according to its website. TA Associates acquired a majority stake in the Dubai-based company in 2024.