Lloyd Price
- Jul 3, 2023

Big Tech Big Health M&A: Potential mega deals in 2023 or 2024?

Exec Summary:

The healthcare industry is constantly evolving, and mergers and acquisitions are one way that companies can stay ahead of the curve. It will be interesting to see which of these deals (if any) actually materialize in the coming year.

These are just a few of the rumored big healthtech M&A deals that could happen in 2023 or 2024:

Amazon acquiring Teladoc Health. This deal would combine Amazon's online retail and cloud computing expertise with Teladoc's telehealth platform. The combined company would be a major player in the digital health space, with a reach of millions of patients.
Apple acquiring Aetna. This deal would give Apple a major foothold in the healthcare insurance market. Aetna's vast customer base and data analytics capabilities would complement Apple's health tracking and wearables business.
UnitedHealth Group acquiring Humana. This deal would create the largest health insurance company in the United States. UnitedHealth Group and Humana would have a combined market capitalization of over $400 billion
Amazon acquiring Medtronic. This deal would give Amazon a major presence in the medical device market. Medtronic is one of the leading medical device companies in the world, with a wide range of products, including pacemakers, insulin pumps, and artificial knees.
Apple acquiring Johnson & Johnson's healthcare business. This deal would give Apple a major presence in the pharmaceutical and consumer healthcare markets. Johnson & Johnson's healthcare business includes a wide range of products, including over-the-counter medicines, prescription drugs, and medical devices.
Google acquiring Illumina. This deal would give Google a major presence in the genomics market. Illumina is one of the leading genomics companies in the world, with a wide range of products, including DNA sequencing machines and software.
Microsoft acquiring McKesson. This deal would give Microsoft a major presence in the pharmaceutical distribution market. McKesson is one of the leading pharmaceutical distributors in the world, with a wide range of products and services.
UnitedHealth Group acquiring Cigna. This deal would create the largest health insurance company in the world. UnitedHealth Group and Cigna would have a combined market capitalization of over $1 trillion.

In addition to these rumored deals, there are a number of other healthtech companies that could be potential acquisition targets in 2023. These include:

Evolent Health, a company that provides population health management services to health systems and insurers.
Oscar Health, a health insurance company that uses technology to deliver personalized healthcare services.
Zocdoc, an online marketplace for booking doctor's appointments.
CureMD, a company that provides virtual care services to patients with chronic conditions.
Health Catalyst, a company that provides data analytics and insights to healthcare organisations.

These are just a few of the many healthtech companies that could be in play in 2023. The healthcare industry is ripe for consolidation, and we can expect to see more M&A activity in the coming years.

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Global healthcare M&A market 2022

The global healthcare M&A market in 2022 was strong, with deal volume and value both reaching record highs. According to Bain & Company, the number of deals rose 36% to 515, up from 380 the prior year. Total disclosed value more than doubled to $151 billion from $66 billion. The average disclosed deal value soared 134%, mainly because of 5 buyouts greater than $5 billion, compared with just 1 the year earlier.

The healthcare private equity market was particularly active in 2022, with deal value reaching $108 billion, up from $58 billion in 2021. This was the second-highest year on record for healthcare private equity in terms of disclosed deal value.

The strong M&A activity in the healthcare sector was driven by a number of factors, including:

The continued growth of the global healthcare market, which is expected to reach $10 trillion by 2025.
The increasing need for innovation in healthcare, as evidenced by the growing number of new drugs and medical devices being developed.
The consolidation of the healthcare industry, as larger companies seek to acquire smaller, more innovative businesses.

The largest healthcare M&A deal of 2022 was Amgen's $27.8 billion acquisition of Horizon Therapeutics. Other notable deals included:

Bristol Myers Squibb's $74 billion acquisition of Celgene
Johnson & Johnson's $41 billion acquisition of Momenta Pharmaceuticals
AbbVie's $35 billion acquisition of Allergan
Pfizer's $21 billion acquisition of Arena Pharmaceuticals

The global healthcare M&A market is expected to remain active in 2023, as companies continue to look for ways to grow and innovate. However, the market is likely to face some challenges, such as rising interest rates and increased regulatory scrutiny.

Here are some of the key trends that are expected to shape the global healthcare M&A market in 2023:

Increased focus on digital health: Healthcare companies are increasingly looking to acquire digital health businesses in order to improve their offerings and stay ahead of the competition.
Growth of the life sciences sector: The life sciences sector is expected to continue to grow in the coming years, driven by the development of new drugs and medical devices. This growth is likely to lead to increased M&A activity in the sector.
Consolidation of the healthcare industry: The healthcare industry is consolidating, as larger companies seek to acquire smaller, more innovative businesses. This trend is expected to continue in 2023.
Increased regulatory scrutiny: Healthcare M&A deals are increasingly being scrutinized by regulators. This trend is likely to continue in 2023, as regulators seek to protect consumers and ensure that mergers and acquisitions do not harm competition.

Global healthcare M&A market 2023

The global healthcare M&A market in 2023 is expected to remain active, but with some slowdown from the record-breaking levels seen in 2022. According to PwC, deal volume is expected to decline by 8% in 2023, while deal value is expected to decline by 15%. This slowdown is due to a number of factors, including:

Rising interest rates, which are making it more expensive for companies to borrow money to finance acquisitions.
Increased regulatory scrutiny, which is making it more difficult for companies to complete mergers and acquisitions.
Uncertainty about the global economic outlook, which is making companies more cautious about making major investments.

Despite these challenges, there are still a number of factors that are expected to drive M&A activity in the healthcare sector in 2023. These include:

The continued growth of the global healthcare market, which is expected to reach $10 trillion by 2025.
The increasing need for innovation in healthcare, as evidenced by the growing number of new drugs and medical devices being developed.
The consolidation of the healthcare industry, as larger companies seek to acquire smaller, more innovative businesses.