GlaxoSmithKline and Novartis, two of the world’s largest pharmaceutical manufacturers, have announced a new multi-billion deal set to reshape both businesses.
The transaction worth around £9.5bn will see Novartis acquire GSK’s cancer drugs business, while selling its vaccines division to GSK for $7.1bn.
Sale of the division will exclude the flu vaccine unit but will see a swapping of assets while combining their consumer health units.
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Both companies said combining their over-the-counter units would help boost the fortunes of both the companies and potentially lead to annual revenues of $6.5bn.
Chief executive of Novartis, Joseph Jimenez, said the moves would help the firm focus on its key businesses as the company continues to experience sluggish growth.
“The transactions mark a transformational moment for Novartis,” he said in a statement after it was also announced the firm is to sell its animal health division to pharmaceutical Lilly for around $5.4bn.
“They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”
His counterpart Andrew Witty, chief executive at GSK, added: “Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce.
“With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.”