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Novartis, GSK, Eli Lilly in $27-bn three-way deal

Agencies  Zurich/London, April 22, 2014
First Published: 23:22 IST(22/4/2014) | Last Updated: 23:32 IST(22/4/2014)

British pharma giant GlaxoSmithKline and Swiss peer Novartis announced a major shake-up of their healthcare divisions on Tuesday in deals worth billions of dollars.


GSK will sell its oncology business to Novartis for $14.5 billion (Rs 88,450 crore), in cash, and buy the Swiss firm’s vaccines division, excluding flu, for up to $7.1 bn (Rs 43,310 crore), also in cash, the British firm said.

Under a “major three-part transaction” with Novartis, GSK will own also 63.5% of a newly-created consumer healthcare business with annual revenue of around $10.9 bn (Rs 66,490 crore).

In a separate statement, US pharma giant Eli Lilly said it had reached an agreement to acquire the Novartis animal health division for $5.4 billion (Rs 32,940 crore).

“The transactions mark a transformative process for us,” said Novartis CEO Joe Jimenez. “They also improve our financial strength, and are expected to add to our growth rates and margins.”

“We reckon the real value of the deal should be searched for in the pipeline and the newly launched products, strengthening Novartis’ position in melanoma and haematology,” Vontobel analyst Andrew Weiss said of the cancer deal with GSK.

The global pharma sector has seen a flurry of deals recently. Pfizer reportedly made a $101-billion offer for AstraZeneca. Canada’s Valeant Pharma International said on Tuesday it has offered to buy Botox maker Allergan for roughly $47 billion.

(With inputs from Reuters and AFP)

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