Michael Barbella, Managing Editor06.16.22
COVID-19 hasn't been a total detriment to society. It's had its benefits.
One silver lining to the pandemic's dark storm clouds is the increase in M&A activity in China's medtech sector.
Mergers and acquisitions (M&As) in China's medical device sector have significantly increased during the COVID-19 pandemic. According to GlobalData’s Medical Devices Deal Database, the number of key M&A activities in Chinese major markets quadrupled from 2018 to 2021. The leading company notes that In-vitro diagnostics (IVD) remains the most active market for investors in China—not surprisingly—especially in areas related to COVID-19 tests. This activity is expected to continue in 2022.
“The medical device industry has been facing fierce competition due to China’s volume-based procurement policy in recent years," said Tina Deng, MSc, a principal medical devices analyst at GlobalData. "The players in the medical devices market have been under pressure for organic growth. Additionally, device manufacturers need to keep investing on novel technology to update mature product lines or expand new product portfolios. Therefore, to continuously grow and enter high-potential market segments, many medical device companies choose to speed the development by accelerating M&As. The most active market is IVD, followed by medical equipment distributors, specialized sectors, diagnostic imaging, cardiovascular devices, and hospital supplies. The value of deals in IVD accounts for approximately 31% of the total deals value from 2018 to 2021. While other medical device companies struggled during the COVID-19, revenue of IVD manufacturers, specifically COVID-19 testing firms, received a great boost. As a result, players are actively seeking M&A opportunities to further strengthen their product offerings and expand market share in China.”
One silver lining to the pandemic's dark storm clouds is the increase in M&A activity in China's medtech sector.
Mergers and acquisitions (M&As) in China's medical device sector have significantly increased during the COVID-19 pandemic. According to GlobalData’s Medical Devices Deal Database, the number of key M&A activities in Chinese major markets quadrupled from 2018 to 2021. The leading company notes that In-vitro diagnostics (IVD) remains the most active market for investors in China—not surprisingly—especially in areas related to COVID-19 tests. This activity is expected to continue in 2022.
“The medical device industry has been facing fierce competition due to China’s volume-based procurement policy in recent years," said Tina Deng, MSc, a principal medical devices analyst at GlobalData. "The players in the medical devices market have been under pressure for organic growth. Additionally, device manufacturers need to keep investing on novel technology to update mature product lines or expand new product portfolios. Therefore, to continuously grow and enter high-potential market segments, many medical device companies choose to speed the development by accelerating M&As. The most active market is IVD, followed by medical equipment distributors, specialized sectors, diagnostic imaging, cardiovascular devices, and hospital supplies. The value of deals in IVD accounts for approximately 31% of the total deals value from 2018 to 2021. While other medical device companies struggled during the COVID-19, revenue of IVD manufacturers, specifically COVID-19 testing firms, received a great boost. As a result, players are actively seeking M&A opportunities to further strengthen their product offerings and expand market share in China.”