Healthcare M&A: The vital signs are looking good in 2025

The healthcare sector maintains its position as one of the most active deal-making environments, presenting well-defined opportunities for dealmakers who understand the underlying trends.

Geographic distribution: US leadership with meaningful diversification

The United States maintains its leadership position in healthcare M&A, with Mergermarket recording 702 deals worth $141.5bn so far this year. This dominance reflects structural advantages including the world's largest healthcare market, deep capital pools, and a mature ecosystem of both strategic acquirers and financial sponsors.

Recent major transactions exemplify this leadership, with deals like Novartis' $3.1bn acquisition of Anthos Therapeutics demonstrating the continued appetite for large-scale pharmaceutical acquisitions focused on cardiovascular therapeutics. Similarly, Bristol Myers Squibb's agreement to licence a next-generation cancer drug from BioNTech for up to $11.1bn showcases the premium valuations being paid for innovative oncology assets.

However, the data shows meaningful activity across European markets demonstrating strong deal flow, including:

• UK – 133 deals, $22.8bn

• Germany – 91 deals, $4.7bn

• Switzerland – 48 deals, $7.7bn

This pattern indicates that acquirers recognise innovation and value creation opportunities extend well beyond traditional North American markets. 

Asian markets, particularly Japan (141 deals, $5.3bn) and South Korea (41 deals, $1.8bn), are showing notable activity levels. These markets offer unique value propositions – from advanced manufacturing capabilities to specialised therapeutic expertise – making them attractive targets for international acquirers seeking global expansion.

Deal techniques: strategic optimisation in action

The breakdown of deal techniques reveals important market dynamics. Mergermarket records show divestment activity represents 654 deals worth $132.4bn so far this year, indicating that large healthcare conglomerates continue optimising their portfolios by shedding non-core assets. This creates opportunities for both strategic acquirers seeking bolt-on acquisitions and financial sponsors looking for platform investments.

Acquisitions of assets dominate the landscape with 134 deals worth $62.1bn, reflecting ongoing consolidation as companies pursue scale, expand therapeutic capabilities, and realise operational synergies. Public offers show 46 deals worth $29.4bn suggesting competitive auction processes and healthy valuations with multiple bidder scenarios.

Leveraged buyouts maintain steady presence with 142 deals worth $33.4bn, demonstrating private equity's continued appetite for healthcare assets. The sector's defensive characteristics, predictable cash flows, and growth prospects make it particularly attractive to financial sponsors, especially in healthcare services and medical devices.

Sector focus: innovation drives premium valuations

Deal concentration within specialised healthcare subsectors reflects the market's focus on high-growth, innovation-driven segments. Pharmaceutical preparations and research and development activities lead transaction volumes, underlining the continued importance of drug discovery in driving valuations and strategic interest.

The focus on cutting-edge therapeutic modalities is evident in deals like Novartis' planned acquisition of Regulus Therapeutics Inc. in a transaction valued at up to $1.7 billion, aimed at strengthening Novartis's pipeline in RNA (ribonucleic acid) targeted therapies. 

Surgical and medical instruments transactions highlight ongoing digitalisation in healthcare delivery. These deals often involve companies developing next-generation surgical robotics, diagnostic equipment, and digital health solutions that improve patient outcomes whilst reducing costs. EssilorLuxottica's acquisition of Optegra, an AI-focused ophthalmology platform, demonstrates how traditional healthcare companies are integrating artificial intelligence to enhance their service offerings.

Market drivers: transformation accelerated

Digital transformation remains a primary catalyst, with traditional healthcare companies acquiring technology platforms to enhance service delivery and data analytics capabilities. The COVID-19 pandemic permanently altered healthcare delivery expectations, creating sustained demand for telemedicine, remote monitoring, and digital therapeutics.

TELUS Health's $500m acquisition of Workplace Options, a global provider of remote wellness and telehealth solutions, supports this trend as companies pursue category leadership in virtual care. This transaction illustrates how healthcare organisations are investing heavily in digital capabilities to meet evolving patient expectations.

Demographics are also providing sustained tailwinds. An aging global population and increasing prevalence of chronic diseases create ongoing demand for healthcare innovation, supporting premium valuations for companies addressing these trends, particularly in oncology, neurology, and age-related conditions.

Strategic outlook: momentum continues

The healthcare M&A market is positioned for continued strength through 2025, supported by fundamental sector drivers and ample capital availability. Corporate development teams should focus on identifying targets that align with long-term strategic objectives whilst offering near-term value creation opportunities.

For advisors, the market presents opportunities across the deal spectrum, from large-scale strategic combinations to smaller, specialised transactions. Success requires deep sector expertise and the ability to navigate complex regulatory environments whilst managing sophisticated buyer expectations.

The data is clear: healthcare M&A fundamentals remain strong, opportunities are well-defined, and execution capability will determine winners.