Pharmaceutical giant GlaxoSmithKline Plc is buying 37 percent stakes of the other giant company Novartis. The company bought the shares for $13 billion. The company funded its purchase by selling its other companies such as Horlicks and other brands.
Multinational company Glaxosmith withdrew itself from the bidding for Pfizer last week. The company was in venture with Novartis since 2015.
As quoted by Bloomberg, “While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price,” Novartis chief executive officer Vas Narasimhan said in the statement.
As reported by Bloomberg the CEO Narasimhan also said, “The sale will also strengthen Novartis’s ability to drive shareholder returns and make bolt-on acquisitions.”
With the acquisition the firm aims at paying attention to over-the-counter medicines and other products such as mouth wash and toothpastes. Thus, the company considered to sell its other brands including Horlicks, as reported by Telegraph UK.
As quoted by Telegraph UK, Emma Walmsley, chief executive officer, GlaxoSmithKline, said “the deal would allow the FTSE 100 pharmaceutical firm to ‘capture the full value’ of the division, whose products include Panadol painkillers and Nicotinell stop-smoking patches, as well as improving cash flow and boosting adjusted earnings. Most importantly it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals R&D.”