GlaxoSmithKline said on Tuesday it will buy Novartis’s 36.5 percent stake in their consumer healthcare joint venture for $13 billion in cash, and will also begin a strategic review of some other businesses. GSK last week quit the race to buy Pfizer’s consumer healthcare business, endangering an auction the U.S. drugmaker hoped would bring in as much as $20 billion.
The deal would boost adjusted earnings and cash flows, helping accelerate efforts to improve performance, she said.
“Most importantly it also removes uncertainty and allows us to plan the of our capital for other priorities, especially pharmaceuticals R&D.”
The transaction is set to be completed in the second quarter subject to necessary approvals.
“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,” Novartis CEO Vas Narasimhan said.
The money would be used by Novartis to expand its business organically as well as for bolt-on acquisitions, the Basel-based company said.
