Novartis in $16bn GSK division deal

first_img Share Sharing is caring! Share Tweet HealthInternationalLifestylePrint Novartis in $16bn GSK division deal by: – April 22, 2014center_img 972 Views   no discussions Novartis said the deals would help to strengthen its financial positionNovartis and GlaxoSmithKline, two of the world’s top drugmakers, have struck a multi-billion-dollar deal to join forces and reshape their businesses.The deal involves swapping assets and combining their consumer health units.Novartis will acquire GSK’s cancer drugs business for $16bn (£9.5bn) and sell its vaccines division, excluding the flu unit, to GSK for $7.1bn.In a separate deal, Novartis has agreed to sell its animal health division to Lilly for nearly $5.4bn.Novartis said the moves would help the firm focus on its key businesses.“The transactions mark a transformational moment for Novartis,” Joseph Jimenez, chief executive of Novartis, said in a statement.“They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”‘Build greater scale’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 £6.5bn.“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce,” Andrew Witty, chief executive, of GSK, 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.”GSK said the agreement with Novartis “significantly exceeds GSK’s returns criteria” and the transaction “would increase overall GSK revenues by £1.3bn to £26.9bn”.Glaxo shareholders will get a £4bn capital return from the deal proceeds, the firm said.BBC News Sharelast_img

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