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| Novartis and GSK to exchange assets and launch joint venture | Novartis and GSK to exchange assets and launch joint venture |
| (about 3 hours later) | |
| Novartis and GlaxoSmithKline, two of the world's top drugmakers, have struck a multi-billion-dollar deal to join forces and reshape their businesses. | Novartis and GlaxoSmithKline, two of the world's top drugmakers, have struck a multi-billion-dollar deal to join forces and reshape their businesses. |
| The deal involves swapping assets and combining their consumer health units. | The deal involves swapping assets and combining their consumer health units. |
| Novartis will acquire GSK's cancer drugs business for $16bn (£9.5bn) and sell its vaccines division, excluding the flu unit, to GSK for $7.1bn. | Novartis will acquire GSK's cancer drugs business for $16bn (£9.5bn) and sell its vaccines division, excluding the flu unit, to GSK for $7.1bn. |
| In a separate deal, Novartis has agreed to sell its animal health division to Lilly for nearly $5.4bn. | In a separate deal, Novartis has agreed to sell its animal health division to Lilly for nearly $5.4bn. |
| Novartis said the moves would help the firm focus on its key businesses. | Novartis said the moves would help the firm focus on its key businesses. |
| "The transactions mark a transformational moment for Novartis," Joseph Jimenez, chief executive of Novartis, said in a statement. | "The transactions mark a transformational moment for Novartis," Joseph Jimenez, chief executive of Novartis, said in a statement. |
| "They also improve our financial strength, and are expected to add to our growth rates and margins immediately." | "They also improve our financial strength, and are expected to add to our growth rates and margins immediately." |
| 'Build greater scale' | 'Build greater scale' |
| The deals are a part of Novartis's review of its business as it continues to face sluggish growth. | The deals are a part of Novartis's review of its business as it continues to face sluggish growth. |
| Novartis and GSK said that combining their over-the-counter (OTC) units would help boost the fortunes of both the companies. | Novartis and GSK said that combining their over-the-counter (OTC) units would help boost the fortunes of both the companies. |
| The combined unit will have annual revenues of £6.5bn. | The combined unit will have annual revenues of £6.5bn. |
| "Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce," Andrew Witty, chief executive, of GSK, said in a statement. | "Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce," Andrew Witty, chief executive, of GSK, said in a statement. |
| "With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders." | "With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders." |
| GSK said the agreement with Novartis "significantly exceeds GSK's returns criteria" and the transaction "would increase overall GSK revenues by £1.3bn to £26.9bn". | GSK said the agreement with Novartis "significantly exceeds GSK's returns criteria" and the transaction "would increase overall GSK revenues by £1.3bn to £26.9bn". |
| Glaxo shareholders will get a £4bn capital return from the proceeds of the deal, the firm said. | |
| Botox in play | |
| The tie-up between the two firms came at the same time as Canadian drugs firm Valeant offered to buy Botox maker Allergan for $47bn (£27.9bn). | |
| Allergan's largest shareholder hedge fund Pershing Square, run by activist investor Bill Ackman, said it supported the bid. | |
| In a statement, Valeant said buying Allergan would help it to drive growth, creating an "unrivalled platform for value creation in healthcare". |