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Global Pharma and Biotech M&A "Feels the Heat" in 2016


January 11, 2017

Findings from Mergermarket's Pharma, Medical and Biotech (PMB) Trend report 2016 shows the sector "felt the heat" in 2016, with M&A activity falling in reaction to new regulations.

The report states that total deal values for the sector fell 27.8% in 2016 to their third highest values on Mergermarket record (since 2001) - US$ 283.4bn - from 2015’s record-breaking US$ 392.4bn. Volume, despite dropping by 52, finished the year with 1,439 deals, the second highest number of transactions on record after the previous year’s 1,491.
Government regulations also appeared to have an effect on cross-border activity, according to the report. 2016 saw 468 such deals worth USD 126.5bn, a 21.8% decrease in value with 38 fewer deals compared to 2015’s 506 deals worth a total of US$ 161.7bn. 2016 also saw a 51.5% decrease in value with 26 more deals compared to 2014 (442 deals, USD 260.9bn).
While the US was once again the most targeted region for PMB M&A activity, with 528 deals worth US$176.7bn, this figure is a 40.8% decrease with 74 fewer deals compared to the 2015 values (US$ 298.4bn, 602 deals). 2016 also saw the US’s global market share decrease from 76% to 62.4%.

Chinese inbound activity for the US reached all-time highs in 2016, seeing China’s highest ever investment values in US PMB assets with US$ 1.5bn and eight deals. With Chinese regulatory bodies looking to significantly reduce the outflow of capital from its borders, however, such a trend may not continue in 2017, the report concludes.
View the report here: http://www.mergermarket.com/pdf/MergermarketTrendReport.Q1-Q42016.Pharma,Medical,Biotech.pdf

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