GlaxoSmithKline plc (GSK) completed a three-part transaction agreement with Novartis on Monday.
As part of the transaction, GSK paid $5.25 billion to purchase Novartis’ global vaccines business, excluding its influenza vaccines. The two companies also agreed to create the Consumer Healthcare joint venture, with GSK holding majority control and a 63.5 percent equity share. In return, Novartis acquired GSK's oncology business for $16 million.
GSK’s net after-tax proceeds from the transaction with Novartis amount to an estimated $7.8 billion, which takes into account the $16 billion paid for GSK's oncology portfolio and the purchase of Novartis's vaccines business. The company plans on sharing $6.2 billion of those proceeds with its shareholders.
“Completion of this transaction represents a major step forward in the group’s strategy to create a stronger and more balanced set of businesses across Pharmaceuticals, Consumer Healthcare and Vaccines,” Sir Andrew Witty, the CEO of GSK, said. “We will now be focused on rapidly implementing our integration plans to realize the growth and synergy opportunities we see in the new Consumer Healthcare and Vaccines businesses."
More details about the agreement will be shared during an investors' meeting on May 6.