- Deal flow is expected to rebound after dropping 5 per cent in 2018
- Political uncertainty, new regulations weighed on transactions last year
Mergers and acquisitions in the health care sector are expected to rebound this year, exceeding US$400 billion following Bristol-Myers Squibb’s deal for Celgene last week, according to the law firm Baker McKenzie.
Political uncertainty and new regulations that came into force in 2018 weighed on deal flow last year, sending merger activity in the sector down 5 per cent last year to US$308 billion.
Companies in the US and Asia are expected to be among the biggest buyers this year, with many deals based around health care technology, Baker McKenzie said. That includes Takeda Pharmaceutical’s US$62 billion transaction for the Irish drug maker Shire, which is expected to close on Tuesday.
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New rules that allow biotechnology companies and dual-class shareholding structures to more easily list in Hong Kong also have boosted initial public offering activity in the sector, the law firm said.
“Pressure to lower costs and adjust to value-based care models, as well as meet the demands of technology-driven consumers and the rise in consumer health care devices, mean that buyers are looking to acquire companies capable of evolving within the landscape,” said Ben McLaughlin, global chairman of Baker McKenzie’s health care industry group.
Source: South China Morning Post