By Sarah Sloat 
 

Novartis AG and Roche Holding AG said Thursday that the Swiss pharmaceutical companies have agreed for Novartis to sell its holding of Roche bearer shares to Roche for a total consideration of $20.7 billion.

Novartis said it expects to report a gain from the transaction of approximately $14 billion.

The companies said the purchase would be debt-financed by Roche. It plans to cancel the shares it acquires from Novartis, raising its free float to 24.9% from 16.6% currently.

Novartis has held Roche shares since 2001 and currently holds 53.3 million bearer shares of Roche's common stock, about 33% of aggregate outstanding bearer shares. Novartis acquired the stake between 2001 and 2003 for a total of about $5 billion as a long-term investment.

"I am convinced that the envisaged transaction is in the best interest of Roche and the holders of Roche equity securities from a strategic and economic perspective," Christoph Franz, Roche's chairman of the board of directors, said.

 

Write to Sarah Sloat at sarah.sloat@wsj.com

 

(END) Dow Jones Newswires

November 04, 2021 02:48 ET (06:48 GMT)

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