China M&A projected to track close to 2016's achievements

The previous year had new record highs.

M&A activity in China’s healthcare industry continues to rise, and is expected to keep on going.

“China’s national investment trends in healthcare saw a shift from traditional targets, such as medical examination centres and dental clinics to core business areas including hospitals, rehabilitation centres, and clinics from 2012 to 2015,” says Leon Qian, partner at PwC.

He shares that the disclosed number of deals in hospitals increased steadily over the period, with domestic M&A deals identified as the most active category. In total, there were 122 domestic deals in hospitals, representing 54.5% of the overall amount while the total value reached CNY13.79 billion.

“Data also showed that the increase in investments in general hospitals by both size and volume outpaced the growth of specialised hospitals in 2014,” says Qian. “The upward trend was maintained in 2015. Over the year, a total of 27 deals involving general hospitals were recorded, with a value of CNY3.98 billion.”

A recent analysis, also from PwC, says the healthcare industry will become more dynamic in 2017. It says healthcare management enterprises and large insurance players will be key buyers, and that private hospitals will feel pressure to reform and consolidate through M&A.

Looking ahead, Qian says M&A activities in China’s healthcare industry are expected to continue rising, supported by further deepening of government reforms in the industry, as well as new technology including web-based solutions that are helping to reshape the traditional healthcare landscape.