GSK buys out Novartis in $13bn consumer healthcare deal

GSK has revealed that it will buy Novartis out of their joint consumer healthcare business.

The deal was announced just days after GSK said it was withdrawing its bid to acquire Pfizer’s consumer healthcare business.

UK-based GSK will buy out Novartis’ 36.5% stake in the joint venture, which sells toothpaste brand Sensodyne and drinks brand Horlicks, for $13 billion.

Novartis had the right to require GSK to purchase its stake between March 2018 and March 2035.

“The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading consumer healthcare businesses,” said Emma Walmsley, CEO of GSK.

She added: “Most importantly, it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals research and development.”

GSK is carrying out a strategic review of Horlicks and other nutrition products to support funding for the transaction.

“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,” added Vas Narasimhan, CEO of Novartis.

“This will strengthen our ability to allocate capital to grow our core businesses, drive shareholder returns, and execute value creating bolt-on acquisitions as we continue to build the leading medicines company, powered by digital and data.”

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