Healthcare M&A stalls in Q1 of 2026 amid macro uncertainty and geopolitical tensions
UK healthcare M&A recorded 53 deals in Q1 2026, down from 72 in Q1 2025, a 26% year-on-year decline, reflecting a more cautious dealmaking backdrop amid macro uncertainty and renewed geopolitical tensions in the Middle East. This is according to Heligan Group’s UK healthcare M&A Q1 2026 update report.
Health & social care dominated Q1 with 57% of deals, driven by continued consolidation across fragmented, defensive subsectors such as residential care, nurseries, complex care, pharmacy and broader healthcare services.
81% of buyers were strategic, consistent with 83% in 2025, reflecting continued focus on synergies, scale and pipeline expansion with private equity being the most active in medical devices and pharma.
Ramesh Jassal, partner, Corporate Finance, Healthcare at Heligan Group, said, “Deal flow remained broad-based in Q1, with notable hotspots in elderly care, pharma, pharmacies and medical devices, underlining sustained appetite for essential, needs-led services.”
Despite softer volumes, large-cap activity persisted, particularly inpPharma & life sciences. Deals included GSK’s £1.7bn acquisition of RAPT Therapeutics, Smith & Nephew’s £450m acquisition of Integrity Orthopaedics, and Sovereign Capital Partners’ acquisition of Apollo Homecare.
Cross-border activity remained balanced, with 23% inbound vs. 20% outbound deals, and UK buyers continued to prioritise US expansion, alongside interest in France, Germany and Belgium.
“Financing conditions remain tight,” added Jassal. “Elevated interest rates, staffing cost pressures, and uncertainty around ICB funding are extending timelines and constraining deal execution. Geopolitical tensions (including US–Middle East dynamics) are also feeding into energy price volatility and inflation expectations, reinforcing a more cautious, risk-off investor stance with greater valuation scrutiny.
“Despite a more cautious environment, resilient demand for defensive, needs-led healthcare assets continues to underpin M&A activity, particularly for high-quality platforms with strong earnings visibility.
“In 2024, deal activity increased into 2025, with strong Q1 volumes and solid year-end closings, reflecting momentum from prior pipelines. However, activity declines into 2026, with a weaker Q1 indicating a slower deal execution with economic uncertainty and ongoing cost and regulatory pressures in healthcare,” concluded Jassal.