Healthcare solutions provider, Novartis, has entered into an agreement with GlaxoSmithKline to divest its 36.5% stake in its consumer healthcare joint venture for $13 billion.
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This sale will allow Novartis to focus on the development and growth of its core business with the proceeds set to be used according to capital allocation priorities, including bolt-on acquisitions.
“While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price,” explained Vas Narasimhan, CEO of Novartis. “This will strengthen our ability to allocate capital to grow our core businesses, drive shareholder returns, and execute value creating bolt-on acquisitions as we continue to build the leading medicines company, powered by digital and data.”
Formed in 2015, the joint venture was part of Novartis’ portfolio transformation, comprising a three-part inter-conditional transaction with GSK, which included the combination of the Novartis OTC business with the GSK consumer healthcare business.
GSK has agreed to pay a cash consideration of $13.0 billion for Novartis’ stake in the consumer healthcare joint venture.