Skip to main content

ANOTHER BIG PHARMA DEAL

NOVARTIS BUYS GSK's CANCER DRUG
Global pharma major Novartis will acquire GlaxoSmithKline plc's (GSK) cancer drugs portfolio for USD 16 billion and sell its vaccines business in return for USD 7.1 billion, apart from forming a joint venture for the consumer healthcare business in a three-part transaction. In separate statements, the two companies said they will combine Novartis' over-the-counter (OTC)) division with GSK's consumer business, creating a new world-leading consumer healthcare business with USD 10 billion in annual sales. UK-headquartered GSK will have majority control with an equity interest of 63.5 per cent in the venture. Novartis, based in Basel, Switzerland, agreed to acquire GSK's oncology products for USD 14.5 billion and up to USD 1.5 billion contingent on a development milestone. Novartis would have opt-in rights to GSK's current and future oncology R&D pipeline. On the other hand, Novartis will divest its vaccines business, excluding flu, to GSK, for USD 7.1 billion plus royalties. The upfront payment is USD 5.25 billion and up to USD 1.8 billion is in milestones. Separately, Novartis said it has initiated a separate sales process for its flu business as part of a value maximisation strategy in the context of the portfolio review. "The transactions mark a transformational moment for Novartis," CEO Joseph Jimenez said. "They focus the company on leading businesses with innovation power and global scale. They also improve our financial strength and are expected to add to our growth rates and margins immediately." Stating that the deal is a win-win for both, GSK Chief Executive Officer Sir Andrew Witty said: "This proposed three-part transaction accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings." The Novartis OTC portfolio is highly complementary to GSK's and has brands such as Voltaren, Excedrin, Otrivin and Theraflu, he added. "Together, we will create the world's premier OTC business with clear opportunities to accelerate revenue growth," he said. The Swiss pharma major separately agreed to sell its animal health division to Lilly for about USD 5.4 billion. This transaction is the result of a competitive process, which upon completion would create a leading animal health business under Lilly's ownership and would optimise the value of the asset in the interest of Novartis shareholders, the company said. 
The joint venture of Novartis OTC and GSK Consumer Healthcare would have leading positions in four key OTC categories - wellness, oral health, nutrition and skin health, the companies said. Almost half of the venture's sales would be derived from brands larger than USD 300 million in annual revenue. The geographic footprint would span all regions, with scale and commercial presence in the developed world as well as in key emerging markets such as Brazil, China, Mexico and Russia. Stressing that opportunities to build greater scale and combine high-quality assets in vaccines and consumer healthcare are scarce, Sir Witty said: "With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders." GSK said its shareholders would receive 4 billion pounds capital return funded by net cash transaction proceeds, expected to be delivered via a B share scheme. The proposed transaction would increase GSK's annual revenue by 1.3 billion pounds to 26.9 billion pounds on a 2013 pro forma basis, it added. 

Comments

Popular posts from this blog

BIRLAS ENTER TOP LEAGUE WITH $50 BILLION M CAP

The Aditya Birla group has entered the top valuation league with a market cap of over USD 50 billion post listing of financial services arm Aditya Birla Capital (ABCL), but Tatas remain on top with over USD 132 billion.
The combined market valuation of the Kumar Mangalam Birla-led listed companies stood at Rs 3,42,354.87 crore (USD 53.5 billion) at the end of Friday's trade.
Among various listed companies of the group, UltraTech Cement's valuation stood at Rs 1,10,097.70 crore at the end of Friday's trade while that of Grasim Industries was Rs 76,881.73 crore.
The newly-listed Aditya Birla Capital's market capitalisation was over Rs 55,000 crore, Hindalco (Rs 54,607.09 crore), Idea Cellular (Rs 32,064.91 crore), Aditya Birla Fashion and Retail (Rs 13,155.73 crore) and Aditya Birla Money (Rs 547.71 crore).
Among Indian conglomerates, the Tata group remains on the top in terms of total valuation of listed firms with about Rs 8,46,567 crore (USD 132.5 billion).
There are 29 pu…

DHIRUBHAI ENJOYED IN WEALTH CREATION

Leading businessman Anil Ambani today said more than creating wealth for himself, his father late Dhirubhai Ambani derived greater happiness from creating wealth for masses. "If you ever asked what part of being an entrepreneur he (late Ambani) enjoyed the most, he would say, 'I enjoy creating wealth. But what I enjoy even more is in creating wealth for the people of the country,'" the Anil Ambani Group chairman said while addressing an industry event here. It can be noted that the late Ambani, who had a humble beginning as a primary school teacher's son in Gujarat, is regarded as the father of capital markets and the equity cult, who made millions of investors millionaires with the IPO of Reliance Textile Industries in 1977. A person who had put in Rs 1,000 then in the IPO is worth over a million today, going by the price of RIL. Stating that the launch of Kothari Pioneer Mutual Fund, which was country's first private MF in 1993, was his (Dhirubhai's) id…

BEAR GRIP ON INDIAN STOCK MARKET

RECORDS 1 WEEKLY FALL IN 6 WEEKS
Gripped by fear psychosis due to geo-political aftershocks, key stock market indices were on a sticky wicket for the fifth day today as both Sensex and Nifty fell over 1 per cent to hit their one-month lows. The sharp plunge left investors poorer by over Rs 95,000 crore as the market cap stood at Rs 1,27,08,846 crore. Risk appetite took a hit after the Economic Survey said achieving the high end of the 6.75-7.5 per cent growth projected previously will be difficult. This is markets' first weekly fall in six.
Weakness in the rupee against the American currency and lacklustre global shares dragged down the indices, too. The BSE 30-share Sensex remained in the negative zone and settled down 317.74 points, or 1.01 per cent, at 31,213.59, its weakest closing since July 4. The index had tumbled 794.08 points in the last four sessions. The NSE Nifty after cracking the 9,700-mark to hit a low of 9,685.55, finally settled lower 109.45 points, or 1.11 per cent…