This week’s graphic highlights data from Kaufman Hall’s recently published 2025 Hospital and Health System M&A in Review on the dynamics in health system merger and acquisition (M&A) activity. The number of announced transactions reached record lows in the first and second quarters, and rebounded in the latter half of the year, bringing the total volume to 46. The average size of the smaller party involved in the transaction declined to $401M, a figure similar to pre-pandemic years. Notably, financial distress continues to be a driver of M&A activity. Distressed M&A activity reached an all-time high in 2025, with 43.5% of all transactions involving a distressed party. Additionally, 45.6% of announced transactions involved a divestiture. While all three rating agencies issued stable or neutral outlooks for 2025 and maintained these for 2026, the M&A landscape in 2026 continues to shift with ongoing portfolio rationalization, persistent financial headwinds and regulatory environment evolution.
