According to a new report from Heligan Group, the UK's healthcare M&A recorded 53 deals in Q1 2026, down from 72 in Q1 2025.
The figures show a 26% year-on-year decline, reflecting a more cautious dealmaking backdrop amid macro uncertainty and renewed geopolitical tensions in the Middle East.
The report
In the first quarter, the health and social care sector accounted for 57% of all deals.
This trend was driven by ongoing consolidation in fragmented, defensive subsectors, including residential care, nurseries, complex care, pharmacies and other healthcare services.
In addition, 81% of buyers were strategic investors, which is consistent with the 83% recorded in 2025.
According to Heligan Group, this demonstrates a sustained emphasis on increasing scale and expanding pipelines.
Private equity firms continue to be the most active participants in the medical devices and pharmaceutical industries.
Despite a decline in overall volumes, there was still significant activity among large-cap companies, particularly in the pharmaceutical and life sciences sectors.
Notable 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 relatively balanced, with 23% of deals being inbound and 20% outbound.
UK buyers continued to focus on expanding into the US, while also showing interest in France, Germany and Belgium.
"Financing conditions remain tight," said Ramesh Jassal, Partner, Corporate Finance, Healthcare at Heligan Group.
"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," Jassal continued.
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