Diagnostics M&A activity to stay subdued in H2 amidst tariff uncertainty

Deal volume slowed after the first quarter.

Merger and acquisition (M&A) activity in diagnostics is expected to remain subdued in the second half of the year (H2), as tariff uncertainties prompt companies to adopt more cautious strategies, according to a BMI report.

Deal volume slowed after the first quarter, despite a strong start to the year in the medical device sector.

“If no major trade deals are announced ahead of the 1 August deadline, higher tariffs would add further downside risks to the global economy and would raise the risk of a bigger pickup in inflation in the US,” the report said.

Global average tariff rates have risen to an estimated 15–17%, up from 13–14%.

In response, companies are focusing on operational adjustments such as reshoring manufacturing, regionalising supply chains, and deferring large-scale cross-border transactions.

M&A activity in H2 is likely to be dominated by smaller, strategic deals focused on category leadership and expanding into high-growth therapeutic areas, including surgical robotics, cardiovascular disease, and oncology.

“Companies will favour tuck-in acquisitions and regional deals that can be integrated with existing operations, while deferring large, cross-border transactions until greater clarity emerges on trade and economic policy,” it added.

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