Novartis and GSK agree to exchange assets and combine consumer healthcare units
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.
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
“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.