Novartis Receives 10% Annual Profit In Two Decades
Novartis AG agreed to sell its stake in Roche Holding AG, a rival Swiss drugmaker, for $ 20.7 billion, ending its two-year ownership and building up money for potential acquisitions.
The company Novartis took advantage of record voting shares in Roche to shake off the remnants of a failed takeover attempt that began in 2001.
CEO changed the structure of the company
In conclusion Novartis plans to generate about $ 14 billion in capital growth from the investment at a time when the value of pharmaceutical acquisitions is skyrocketing and drug makers need funds to develop new therapies.
The transaction price is 356.93 francs ($ 391) for each voting share. Novartis shares on Thursday in Zurich rose 2.2%, Roshe voting shares rose 2.5% to 421, 80 francs.
In September, Novartis approached Roche with an offer to sell the stake. For Novartis, the deal was attractive because Roche was willing to buy back the entire stake in a single transaction, resulting in a clean exit.
As a result, According to Novartis spokesman Jarvis, the drugmaker sees this as a loss of a non-strategic asset.
Novartis owns 33% of Roshe’s voting shares and the company has received 10% of annual profits from them over the past two decades.