UK healthcare M&A remained resilient in 2025, outperforming other sectors, according to a report released by investment and corporate finance firm Heligan Group.
The report found that, in 2025, strategic and private equity buyers continued to show strong interest in UK healthcare assets.
Despite ongoing macroeconomic uncertainty, geopolitical volatility and regulatory challenges in key global markets, deal volumes remained steady, with UK healthcare M&A activity totalling 280 announced or completed deals last year, broadly flat year-on-year.
The healthcare sector outperforms
In comparison, dealmaking across most UK sectors declined by 10-15% compared to 2024. Healthcare, however, once again outperformed, underlining its status as a defensive, structurally supported sector.
In 2025, the Health and Social Care (H&SC) sector was the leading sub-sector, representing 47% of the total healthcare deal volume in the UK.
This strong performance in the first half of the year was driven by ongoing consolidation in care homes, pharmacies and community-based providers.
These trends reflect demographic pressures, capacity constraints and a strong investor interest in asset-backed, cash-generating models.
The Pharma and Life Sciences sector accounted for 22% of total deal volume, while Medical Equipment and Devices accounted for 17% and Healthcare IT accounted for 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."
Deal activity focused on high-quality assets
While overall volumes remained stable, deal activity in 2025 was increasingly concentrated in high-quality assets.
The diagnostics, digital health and biopharmaceutical platform businesses attracted premium valuations this year.
Notable large-scale elder care transactions, particularly several landmark acquisitions by US-based Real Estate Investment Trusts (REITs), also characterised the market.
These transactions highlight an increasing focus among investors on scale, operational resilience and strong market positions, especially amid rising labour costs and regulatory scrutiny.
Dealmaking in the Pharma and Life Sciences sectors remained robust
Mergers and acquisitions in the pharmaceutical and life sciences sectors remained strong but selective.
Biopharma accounted for 35% of activity in this sub-sector, driven by large pharmaceutical companies seeking access to next-generation therapeutic platforms, such as cell and gene therapies, advanced biologics and AI-enabled drug discovery.
However, increased regulatory caution in the US and Europe led to more disciplined capital deployment, particularly concerning manufacturing-heavy and vaccine-related assets.
Medical Equipment and Devices activity was broadly flat year-on-year, with diagnostics emerging as a key growth area.
The ongoing backlogs in the NHS, the increasing prevalence of chronic diseases and the continued expansion of Community Diagnostic Centres have sustained strong investor interest in imaging, testing and AI-enabled diagnostic platforms.
These technologies can improve both throughput and clinical outcomes.
In 2025, strategic buyers represented 83% of healthcare deals in the UK, highlighting a continued focus on synergies, integration and long-term positioning.
While private equity remained active, it concentrated on bolt-on acquisitions rather than new platform investments, even though it entered 2026 with significant available capital.
Deal geography
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 the 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."
"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.
The report is available to read here.