Strategic M&A drives growth across curative and preventive clusters

The global animal health industry remains a resilient and growing market, with strategic players leveraging acquisitions to unlock value across traditional curative portfolios and high-growth preventive platforms.

Driven by regulatory evolution, rising pet ownership, and the shift toward comprehensive health management, animal health has transitioned from a defensive play to a growth-oriented strategic opportunity.

Key Growth Clusters

The animal health sector presents distinct investment opportunities across complementary segments:

• Preventive Solutions (CAGR: 8-10%): Vaccines, feed additives, and diagnostics are outpacing the market through mRNA and AI innovation
• Curative Pharmaceuticals (4-5%): Antibiotics and therapeutics are providing stable cash flows to fund growth investments
• Companion Animals: Premiumisation trends are driving faster growth in developed markets
• Livestock: Representing 60% of total market value, growth is supported by food security needs and operational efficiency demands

M&A Activity

Strategic M&A activity accelerated over the past 18 months, spanning biotech innovators, pharmaceutical companies, and diagnostics specialists. Europe and North America lead transaction volumes, with buyers pursuing geographic expansion, portfolio diversification, and innovation pipeline access.

Leading players adopt dual-portfolio models, using mature curative assets as cash engines to fund targeted acquisitions in high-growth preventive categories. This enables earnings stability while shifting toward innovation-led growth.

The sector’s fragmentation offers compelling consolidation opportunities, ideal for buy-and-build strategies across European and North American markets.

Financial investor momentum accelerates

Private equity funds are actively deploying capital across both clusters, attracted by the sector’s resilience, strong cash generation, and above-economy growth rates. Interest focuses on companion animal and preventive medicine businesses, though curative platforms remain attractive for their margins and regulatory defensibility.

Looking ahead

M&A activity will accelerate as companies optimise portfolios across the curative-preventive spectrum. Both strategic and financial investors recognise animal health’s exceptional blend of defensive characteristics, innovation potential, and consolidation opportunities in a fragmented market.

This is why, at Investec, we view animal health as one of the most compelling sectors in the European and North American mid-markets. For more information and our full 2025 Animal Health Report, please contact Jan Willem Jonkman, Bart Jonkman or Thom Deckers.