M&A Appetite Remains Robust Among Healthcare and Life Sciences Investors: KPMG Survey

NEW YORK, January 8, 2026 –Amid continued uncertainty, healthcare and life sciences (HCLS) M&A appetite remains strong with a divergence in deal-making expectations. Nearly three quarters of life sciences respondents expect to increase their deal activity compared to 61% of healthcare, according to new findings from the 2026 KPMG Healthcare and Life Sciences Investment Outlook.

“The race for innovation is keeping the M&A market incredibly dynamic,” said Kristin Ciriello Pothier, Americas Life Sciences Sector Leader and Global Healthcare and Life Sciences Deal Advisory Leader at KPMG. “We're seeing a sustained, bullish appetite for deals, fueled by breakthroughs in AI and a strategic push into high-growth areas like biopharma. For leaders, acquiring cutting-edge technology and novel science isn't just an option – it's the primary strategy for accelerating growth and delivering the next generation of therapies.”

The 2026 KPMG Healthcare and Life Sciences Outlook features insights from a survey of 500 industry executives and examines how deal activity and market drivers could influence the 2026 investment landscape of the HCLS sector.  

Key Survey Findings Include:  

• The top factor likely to impact deal activity in 2026 reported by respondents is high valuations followed by uncertainties surrounding future performance and growth ability of targets, as well as competition for a limited number of high-value or innovative targets.
• 60% of life sciences (vs 72% in 2025) and 54% of private equity (PE) and venture capital (VC) (vs 31% in 2025) respondents expect valuations to rise, particularly in biopharma services and healthcare IT; whereas only 41% of healthcare respondents anticipate an increase (vs 60% in 2025). 
• Asked to what extent a decrease in interest rates will influence their company’s ability to do M&A in 2026, over half of life sciences (54%) and PE/VC (55%), and nearly half (48%) of healthcare respondents indicated it will lead to a marginal increase in deal volume.
• A majority of HC (55%) and PE/VC (56%) respondents said they do not anticipate a significant impact from tariffs with regard to their company’s M&A activity over the next year, followed by 46% of life sciences respondents.
• Compared to expectations set at the beginning of 2025, nearly half (46%) of PE/VC respondents indicated their total planned transactions increased by over 10% followed by 44% of life sciences respondents and 41% of healthcare respondents.  

Areas of Capital Deployment Focus for 2026 

When it comes to deploying capital in 2026, improving operational efficiency, expanding into new products or services, and platform expansion or bolt-on acquisitions are forecasted to be key capital deployment areas for HCLS respondents.

"The focus for 2026 is on smart, sustainable growth," said Drew Corrigan, U.S. Healthcare Sector Leader at KPMG. "While M&A remains a key tool, we're seeing equal emphasis on deploying capital internally to strengthen operations. This dual approach – efficiency from within while pursuing strategic platform acquisitions – is how leading organizations are positioning themselves for long-term success."

Select Subsector Highlights: 

• Biopharma respondents cited strategic partnerships and creative financing deals as key drivers of deal momentum in 2026, while oncology and immunology are expected to remain the most competitive areas for acquisition.
• Approximately 90% of medical device respondents expect 10% or more of deals to incorporate artificial intelligence or machine learning as part of the target’s capabilities.
• Consistent with 2025, when asked to rank the most significant challenges that may limit growth and/or investments in healthcare services, nearly half of respondents cited reimbursement pressures.
• Asked what areas they plan to invest in most this upcoming year, respondents in hospital and health systems cited healthcare IT, telehealth, and behavioral health.
• Healthcare IT respondents cited population health management as the most attractive healthcare IT or analytics sub-sector for investment in the next 12-24 months.

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