2019 was an active year for China’s M&A markets. Though not as big as the deal size overseas, China’s domestic M&A deals have been generally active. Since 2015, deal value and volumes has continued to exceed US$20bn and 400 respectively every year. As disclosed, 588 M&A deals were conducted in China’s pharmaceutical and life science sectors in 2019, with a total deal value of US$25 billion, making up 6% of the global M&A (10% in 2018).
In the pharmaceutical sector, the number of M&A deals remained high with more than 400 cases with a deal value of US$22.1bn, the highest in the past 4 years. This was a result of the promotion of policies, such as nationwide volume-based procurement, dynamic adjustment to the National Drug Reimbursement List (NDRL), and encouragement of innovation, as well as the promotion of new capital market listing regulations. With the further deepening of the reform, M&A activity is expected to rise in the future.
In contrast, in the medical device sector, transaction volumes plunged to US$2.7bn, a six-year low, amid overseas M&A stagnation. However, it is worth noting that 2019 was a significant year for the medical device sector with its activeness in the capital market, where 12 companies were successfully listed in the SSE STAR market. With the newly listed companies, we expect to see a rebound in M&A.