GSK and Novartis complete major three-part transaction

UK pharma major GlaxoSmithKline (LSE: GSK) said this morning that its three-part transaction with Swiss peer Novartis (NOVN: VX) has completed today.

As a result of this transaction, GSK has acquired Novartis’s global Vaccines business (excluding influenza vaccines) for an initial cash consideration of $5.25 billion; has created a new world-leading Consumer Healthcare joint venture with Novartis in which GSK will have majority control and an equity interest of 63.5%; and has divested its Oncology business for an aggregate cash consideration of $16 billion.

The net after tax proceeds of the transaction received by GSK today are estimated to be $7.8 billion. This reflects the full consideration of $16 billion paid today by Novartis for GSK’s Oncology portfolio and related assets. Under the terms of the transaction, up to $1.5 billion of that purchase price may have to be returned to Novartis if certain conditions relating to the COMBI-d Trial are not met. Following the positive results from this study announced last month (The Pharma Letter February 6), GSK says it believes these conditions will be satisfied.