Goldman Sachs predicts healthcare M&A flurry, helped by Donald Trump

William Turvill
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Wall Street giant Goldman Sachs is predicting a mergers and acquisitions (M&A) flurry in the healthcare sector this year, helped by Donald Trump.

After a record 2015 for global M&A, there was a general slowdown in activity last year.

Jami Rubin, unit leader of Goldman’s healthcare research group, noted that activity in the sector was “lower than we thought it would be” in 2016, but is predicting a pick-up this year.

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Discussing expectations for 2017, she said:

The big pharmaceutical and biotech companies need more products in order to grow.

They also have very, very big balance sheets.

And if the Trump administration is to pass repatriation, a lot of cash will come back to the US.

In the run-up to the US election, President-elect Trump pledged to lower the US business rate tax from 35 per cent to 15 per cent in order to encourage offshore firms to repatriate themselves.

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Rubin added: “These are companies that are also facing thinning pipelines, so they need new products.

“And that, I think, is what will drive M&A activity.”

She added: “At the same time, we expect a number of bolt-on deals, deals with smaller companies, technology-driven companies.”