Pharmaceutical giants Novartis and GlaxoSmithKline have agreed to exchange assets and combine their consumer healthcare units.
Novartis will acquire GSK’s oncology drugs business for $16 billion and sell its vaccines division, excluding the flu unit, to GSK for $7.1 billion.
In a separate deal, Novartis has agreed to sell its animal health division to Lilly for nearly $5.4 billion.
Novartis said the moves would help the company focus on its key businesses.
“The transactions mark a transformational moment for Novartis,” Novartis CEO Joseph Jimenez said in a statement.
“They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”
The deals are a part of Novartis’s review of its business as it continues to face sluggish growth.
Novartis and GSK said that combining their over-the-counter (OTC) units would help boost the fortunes of both the companies.
The combined unit will have annual revenues of more than $10 billion.
“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce,” GSK CEO Andrew Witty said in a statement.
“With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.”
Glaxo shareholders will get a $6.5 billion capital return from the deal proceeds, the company said.