UK healthcare M&A remains resilient in 2025 as investors prioritise quality assets and defensive growth

Strategic and private equity buyers maintained strong interest in UK healthcare assets throughout 2025, with deal volumes holding steady despite ongoing macroeconomic uncertainty, geopolitical volatility and regulatory headwinds in key global markets.

UK healthcare M&A activity totalled 280 announced or completed deals in 2025, broadly flat year-on-year, according to the latest Reflecting on 2025: UK Healthcare M&A report from Heligan Group. While dealmaking across most UK sectors declined by 10-15% compared to 2024, healthcare once again outperformed, underlining its status as a defensive, structurally supported sector.

Health and Social Care (H&SC) was the dominant sub-sector, accounting for 47% of total UK healthcare deal volume in 2025, underpinned by a strong first-half performance. Activity was driven by continued consolidation in care homes, pharmacies and community-based providers, reflecting demographic pressures, capacity constraints and investor appetite for asset-backed, cash-generative models. Pharma and Life Sciences represented 22% of total deal volume, followed by Medical Equipment and Devices at 17% and Healthcare IT at 15%.

Ramesh Jassal, Partner, Corporate Finance, Healthcare at Heligan Group, said:
“2025 proved to be a year of resilience rather than expansion for UK healthcare M&A. Deal volumes held steady at 280 transactions, which is notable given the broader slowdown across UK dealmaking. Investors remained cautious but committed, with capital flowing towards high-quality assets offering scale, asset backing and operational resilience.

“Healthcare continues to stand apart from other sectors, supported by long-term demographic tailwinds, predictable demand and strong international interest. While private equity has remained selective, strategic buyers were increasingly active, particularly in bolt-on acquisitions and consolidation strategies.”

While overall volumes remained stable, deal activity in 2025 was increasingly concentrated in high-quality assets. Diagnostics, digital health and biopharma platform businesses attracted premium valuations, while large-scale elderly care transactions, including several landmark acquisitions by US-based Real Estate Investment Trusts (REITs), defined the year. These transactions reflect growing investor focus on scale, operational resilience and defensible market positions amid rising labour costs and regulatory scrutiny.

Pharma and Life Sciences dealmaking remained resilient but selective. Biopharma accounted for 35% of activity within the sub-sector, driven by large pharmaceutical companies seeking access to next-generation therapeutic platforms, including cell and gene therapies, advanced biologics and AI-enabled drug discovery. However, heightened regulatory caution in the US and Europe contributed to more disciplined capital deployment, particularly in manufacturing-heavy and vaccine-exposed assets.

Medical Equipment and Devices activity was broadly flat year-on-year, with diagnostics emerging as a key growth area. Sustained NHS backlogs, rising chronic disease prevalence and the continued rollout of Community Diagnostic Centres supported strong investor interest in imaging, testing and AI-enabled diagnostic platforms capable of improving throughput and clinical outcomes.

Strategic buyers accounted for 83% of UK healthcare deals in 2025, reflecting a continued emphasis on synergies, integration and long-term positioning. Private equity remained active but focused on bolt-ons rather than new platform investments, despite entering 2026 with significant dry powder.

In terms of deal geography, 57% of transactions were internal UK deals, while inbound M&A accounted for 24% and outbound for 19%. The US remained the most influential international market, both as the largest source of inbound investment and the primary destination for UK outbound deals. Preferential trade terms between the UK and US, particularly in pharmaceuticals and medtech, continued to support cross-border activity.

Jassal continued: “UK buyers showed a clear preference for domestic opportunities in 2025, with internal deal volumes increasing as global uncertainty persisted,” added Jassal. “At the same time, the US remains the UK’s most important strategic partner, and we expect this dynamic to continue into 2026.”

“Looking ahead, we anticipate that UK healthcare M&A will remain selective but robust. Falling inflation, easing interest rates and sustained public investment in NHS digital infrastructure and life sciences R&D provide a supportive backdrop, while cost pressures and regulatory complexity are expected to accelerate consolidation across the sector,” concluded Jassal.