Novartis, GSK in multibillion-dollar drug deal
CNBC.com staff | @CNBC
4 Hours Ago
CNBC.com
Novartis, GSK deal 'win win': Pro
Tuesday, 22 Apr 2014 | 3:00 AM ET
Christian Gattiker-Ericsson, chief strategist and head of research at Julius Bär, says the multibillion-dollar deal between GSK and Novartis is "win win" for both companies.
Two of the world's largest pharmaceutical companies have joined forces to create a joint venture, with GlaxoSmithKline (GSK) and Swiss firm Novartis agreeing to create a new consumer healthcare business.
Novartis said on Tuesday it had agreed to acquire GSK's oncology products for $14.5 billion, plus an additional $1.5 billion contingent on a development milestone. GSK, meanwhile, will pay $7.1 billion plus royalties for Novartis' vaccines business, excluding its flu business, Novartis said.
The GSK and Novartis joint consumer healthcare venture will generate approximately £6.5 billion ($10.9 billion) in annual sales, according to GSK.
GSK CEO Andrew Witty said the proposed transaction boosted the British drug maker's plan to generate sustainable, broadly-sourced sales growth and will improve long-term earnings.
David L Ryan | Boston Globe | Getty Images
"The Novartis OTC (over-the-counter) portfolio is highly complementary to GSK's and has many well-known, widely recommended brands," Witty said in a statement.
"Together, we will create the world's premier OTC business with clear opportunities to accelerate revenue growth."
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