Top drug companies strike multi-billion dollar deal
Leading drug company Novartis has announced it will sell off its animal health division to Eli Lilly and Company for $5.4 billion.
In a separate transaction, Novartis has struck a multi-billion dollar deal with GlaxoSmithKline (GSK) to exchange assets and launch a joint venture. Novartis will acquire GSK oncology products for $16 billion.
The company will also sell its vaccines business, except the flu unit, to GSK for $7.1 billion.
Joseph Jimenez, CEO of Novartis, said this marks a "transformational moment" for the company. "We believe the divestment of our smaller vaccines and animal health divisions will enable us to realise immediate value from these businesses for our shareholders," he said.
"Those divisions will benefit from being part of large, global businesses that are also leaders in their segments.
"Patients will benefit from even higher levels of innovation that this focus may afford. Looking ahead, this positions Novartis well for future healthcare industry dynamics."
A joint venture will see the combination of Novartis' over-the-counter unit and GSK Consumer Healthcare, with the aim of creating a world-leading consumer healthcare business. Annual sales are expected to reach around $6.5 billion.
GSK said the transactions will boost the company's annual revenues by £1.3 billion to £26.9 billion.
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