Market Report: 2018 Shaping Up as Record Year for Healthcare Industry Mergers & Acquisitions

While healthcare industry merger and acquisition activity has been on the rise for several years, the early returns suggest that 2018 will be the biggest M&A year in over a decade. According to Bloomberg, $156 billion in deals have been done so far this year. And that number exceeds $200 billion if you count Takeda Pharmaceutical Company’s pending $45 billion acquisition of Shire.

Big Pharma Leads the Way
Much of the impetus for this frantic activity has been supplied by pharmaceutical giants. Big deals in 2018 include:

• GlaxoSmithKline’s purchase of Novartis AG’s stake in a consumer health joint venture for a reported $13 billion;

• Celgene’s $9 billion acquisition of Juno Therapeutics and separate $1.1 billion acquisition of Impact Biomedicines; and

• Multiple acquisitions by Sanofi valued at roughly $15 billion.

Hospital Health Systems
M&A at the hospital health system level has been just as hot and heavy, including:

• A likely merger of Catholic Health Initiatives and Dignity Health that would create the second largest nonprofit health system in the US;

• The pending merger of Jefferson Health and Einstein Health;

• The full-asset-merger of Massachusetts-based Care Group System, which includes Beth Deaconess Medical Center, Lahey Health and a standalone hospital in Newburyport.

The Big One
As heated as things have been so far this year, it appears that 2018’s biggest healthcare M&A deal is still in the offing—namely, the proposed $69 billion merger of Aetna and CVS Health. This month, the deal moved one step closer to fruition with shareholders of both principles approving the transaction. Of course, regulatory approval remains the potential fly in the ointment. So, stay tuned…