GSK to Buy Out Novartis's Stake in Health-Care Venture for $13 Billion -- Update

By Nathan Allen

GlaxoSmithKline PLC agreed to pay Novartis AG $13 billion for its 36.5% stake in their consumer health care joint venture, moving to consolidate the unit just three years after it and Novartis joined forces.

The deal is the first significant strategic move for both companies' young and newly installed chief executives, as they reposition their respective companies amid a series of other reviews and deal making across the industry.

GSK Chief Executive Emma Wamsley, 48 years old, has moved to shake up the company's drug-research efforts , reshuffling or letting go hundreds of executives and scientists since taking over about a year ago. That is part of an industry wide effort at several big pharmaceutical firms to refocus attention and resources on the high-risk, but high-reward business of discovering and bringing to market new drugs.

Novartis Chief Executive Vasant Narasimhan, 41, on the job just since February, has similarly said his main aim is to reinvigorate the company's drug discovery pipeline.

Amid those efforts, both have also been considering how to prune, or bolster, their businesses at the deal table. GSK was among several companies kicking the tires at Pfizer Inc.'s large consumer-goods business, but last week said it wouldn't bid.

Novartis, meanwhile, is considering a sale or spin off its Alcon eye business, and Dr. Narasimhan has said he is also considering options for its U.S. generics business.

(END) Dow Jones Newswires

March 27, 2018 03:02 ET (07:02 GMT)

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