2024 M&A Year in Review - Flipbook - Page 94
94
Financial Services
Life Sciences and Health Care
M&A activity across banking and financial
institutions is anticipated to accelerate in 2025.
Lower interest rates, increased economic activity,
and rising loan demand could support bank
acquisitions.
M&A activity in the life sciences sector is expected to
remain
robust
in
2025,
particularly
in
pharmaceuticals and biotech where well-capitalized
buyers continue to pursue innovation. A pipeline of
promising targets — combined with R&D challenges
and a looming 2028 patent cliff for many blockbuster
drugs — is likely to drive strategic acquisitions,
particularly in oncology, rare diseases, and
innovative therapies. Creative deal structures,
including earnouts and milestones, will be prevalent
to mitigate risks associated with early-stage science.
In the United States, expectations of a more
business-friendly regulatory environment under
the Trump administration could lead to
streamlined bank merger reviews, paving the way
for additional consolidation.
In Europe, the push for cross-border bank mergers to
enhance global competitiveness may gain
momentum, though persistent political and
regulatory hurdles remain key barriers.
M&A for non-bank financial institutions is also
poised for growth. With FinTech now firmly
embedded into the broader financial ecosystem,
strategic consolidation is expected to intensify,
including through bank-FinTech partnerships,
acquisitions in the payment space, and expansions
into on-chain transactions and digital wallets.
Private equity and venture investors are likely to
play a larger role, targeting scalable FinTech
platforms and financial infrastructure providers.
More investors are likely to enter the digital assets
and blockchain space, while AI-driven financial
services will attract further investment. Increased
competition
for
technology-driven
financial
businesses is expected to drive valuations,
particularly in the United States, where the Trump
administration’s “pro-crypto” stance could further
catalyze deal activity.
See our 2025 Financial Institutions Horizons guide
for more insights.
Technology-driven companies are anticipated to
remain in high demand. Companies that offer cloud
computing, generative AI, and similar solutions are
increasingly viewed as critical to accelerating R&D,
clinical trials, and commercialization, making them
attractive acquisition candidates.
In the United States, health care M&A continues to
face headwinds associated with increased interest
from state and local governments to privatize health
care and the uncertain future of recent legislation
impacting the sector such as the Inflation Reduction
Act. However, softening antitrust scrutiny and
private equity interest may propel the continued
consolidation of health care service groups and
providers. For hospital systems in particular,
shrinking operating margins will likely drive
significant merger activity to achieve cost synergies.
Companies are also expected to focus on portfolio
optimization by prioritizing their core products and
disposing of less valuable assets as a way to drive
shareholder value.
See our 2025 Life Sciences and Health Care Horizons
publication for more insights.
