Home Business Novartis and GSK agree to exchange assets and combine consumer healthcare units

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

0

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

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.

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.