Navigating Healthcare M&A in 2026: Advancing Deal Execution Through Regulatory Strategy

Partners in Ropes & Gray’s health care group share their insights about the healthcare M&A market and how the regulatory landscape is shaping deal structure and execution, especially in multistate and highly regulated environments. We also offer practical strategies in navigating regulatory requirements to execute healthcare M&A transactions successfully.

Healthcare Deal Activity Is Rebounding

Health system M&A activity rebounded in Q4 2025 after a slow start to the year, with 17 announced transactions—including four mergers exceeding $1 billion in annual revenue per party. Large private equity megadeals dominated across all healthcare sectors, helping overcome Q2 2025 tariff-related slowdowns. Looking ahead to 2026, deal value and volume in the health services sector are predicted to continue steady growth as marketed assets improve in quality.

Notable 2025 Megadeals Demonstrate Market Strength

The Walgreens take-private transaction by Sycamore Partners, valued at up to $23.7 billion, represented one of the biggest leveraged buyouts in the past decade. Blackstone and TPG's pending acquisition of Hologic in a take-private transaction valued at up to $18.3 billion further underscores continued private equity appetite for healthcare assets. Finally, Ascension’s agreement to acquire AMSURG for approximately $3.9 billion will add more than 250 ambulatory surgery centers across 34 states, reflecting ongoing dealmaking in ambulatory care delivery.

Regulatory Oversight Is Increasing and Complex

Large-scale healthcare M&A and cross-jurisdictional transactions face increasing scrutiny as multiple states expand their oversight authority and federal agencies coordinate more closely on enforcement. This includes new state-level “mini-HSR” laws, enacted in Washington, Colorado, and California, with four more states considering similar legislation. It also encompasses “material change notice” laws, which passed in five states in 2025, and expanding “corporate practice of medicine” regulations. 

State Regulatory Frameworks Continue to Evolve

Several states have adopted or proposed laws and regulations focused on access, competition, cost, quality of healthcare services, and transaction approval processes. Many states now impose substantial pre-closing notice requirements for healthcare transactions. Some state regulators have the authority to approve a transaction or to attach conditions to an approval.  Determining whether a transaction is subject to a particular law in a particular state will depend on the specific parties and transaction in question. These analyses can be complex and are highly dependent on the facts.

Recent legislation in California and Massachusetts has also expanded oversight to include private equity firms, hedge funds, MSOs, and significant equity investors.

Several state agencies across the country, including Massachusetts, Oregon, and California have the authority to initiate cost and market impact reviews (CMIRs) for material change healthcare transactions. New York has also proposed to institute such a process. CMIRs have the potential to extend deal timelines significantly. Although regulators have declined to issue CMIRs in the vast majority of transactions, we expect that the trend to initiate CMIRs will increase going forward. 

Healthcare M&A Remains an Antitrust Enforcement Priority

In the Trump II administration, federal antitrust agencies have returned to a more traditional approach to investigations and enforcement. For example, they have been open to divestiture remedies (provided they are sufficiently robust) and they have resumed the use of HSR early termination for appropriate transactions. However, the agencies have maintained some of the aggressive enforcement posture from the Biden administration, preserving the new HSR rules and 2023 merger guidelines. They have also continued to challenge transactions in court that they find problematic, including in the healthcare space. Beyond M&A, the FTC is actively scrutinizing noncompete agreements in healthcare through case-by-case enforcement and monitoring interlocking directorates. 

Strategies for Executing Complex Healthcare Transactions in 2026

In this environment, a party’s approach to the regulatory implications of a transaction can have a critical impact on structure, timing, and execution. This is particularly the case for complex transactions involving multiple states. Transaction parties can position themselves to succeed in this health care dealmaking environment by keeping in mind the following:

• Consider the implications of a particular transaction under applicable law, including by conducting a preliminary regulatory assessment.
• Account for the regulatory environment as part of deal terms, including cooperation and termination provisions and development of an approach to acceptance of conditions.
• Evaluate the transaction structure from a regulatory lens, including corporate practice of medicine compliance, capital structure, and sale/leaseback transactions.
• Prepare for thoughtful and timely engagement with applicable regulators and coordination with other regulatory approvals.
• Educate clients about compliance obligations and promote quality improvement strategies.

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