Novartis and Alcon to Separate

Novartis said it plans to spin out its Alcon Division into a separately-traded company. The move will allow the Basel, Switzerland-based company and Alcon to focus on respective growth strategies. If the split meets general market conditions, regulatory approvals, final Board of Directors endorsement, and shareholder approval then the planned separation could be completed by the first half of 2019. Novartis said if the Alcon spin out is completed, then it would create a new Switzerland-based company with global scale and reach comprising more than 20,000 employees, with around $7 billion in 2017 sales. The firm said that it will initiate a share buyback of up to $5 billion to be executed by the end of 2019. This action is planned to be largely funded through the proceeds of the divestment to GlaxoSmithKline (GSK) of the consumer health joint venture stake, net of the AveXis acquisition payments. In March Brentford-based GSK spent about $13 billion to buy out Novartis’ interest in the deal joint venture. "Our strategic review examined all options for Alcon ranging from retention, sale, IPO to spinoff, Joerg Reinhardt, Chairman of Novartis said in a release. “The review concluded that a spinoff would be in the best interests of Novartis shareholders and the Board of Directors intends to seek shareholder approval for a spinoff at the 2019 AGM. This transaction would allow our shareholders to benefit from potential future successes of a more focused Novartis and a standalone ...
Source: MDDI - Category: Medical Devices Authors: Tags: Business Source Type: news