Healthcare and life sciences is a robust market. Though it’s not immune to the economic and geopolitical headwinds affecting all industries, its underlying strength will continue to promote dealmaking.
Following a robust 2018, dealmaking activity in the sector softened in 2019.
Our Global Transactions Forecast, compiled in collaboration with Oxford Economics, reflects this. We expect healthcare M&A values to total USD 391 billion in 2019 – a rise from USD 366 billion the previous year.
The cautious mood that defined 2019 will sustain into 2020. Our forecast is for M&A values to slow in 2020, to USD 267 billion.
Ben McLaughlin, Chair of Baker McKenzie’s Global Healthcare & Life Sciences Group, says macro forces are driving this slowdown, not sector-specific causes.
“The US election, stock markets at an all-time high, trade tensions between the US and China, and the ongoing Brexit uncertainty — these factors are holding investors back.”
The good news is that the deceleration should be more muted than in other industries. Then starting in 2021, we expect a recovery in M&A and IPO volumes, as the global economy stabilizes and investor confidence returns.