Novartis to sell Roche stake worth $21bn

Swiss drugmaker Novartis is to sell its stake in domestic rival Roche, bringing an end to a two-decade old investment now worth $21bn. Novartis said in a statement on Thursday that Roche would repurchase the stake it holds in its competitor, which is also headquartered in the Swiss city of […]

Swiss drugmaker Novartis is to sell its stake in domestic rival Roche, bringing an end to a two-decade old investment now worth $21bn.

Novartis said in a statement on Thursday that Roche would repurchase the stake it holds in its competitor, which is also headquartered in the Swiss city of Basel.

Novartis chief executive Vas Narasimhan said the drugmaker’s decision to ditch the stake was “consistent with our strategic focus”, and that it planned to deploy the proceeds to “continue to reimagine medicine”.

The agreement will see Roche repurchase the 53.3m shares Novartis has in its rival, using debt to finance the deal.

In a statement Roche said that the transaction would lead “to the disentanglement of the two competitors” and result in the company “regain[ing] full strategic flexibility”.

Following the deal, Roche chair Christoph Franz said the drugmaker would be “better positioned strategically in the future to provide life-saving medicines and diagnostics to people around the world”.

The holding Novartis has in Roche dates back to 2001, when it began amassing it for a total cost of $5bn. The investment had yielded dividends of more than $6bn, Novartis said.

Narasimhan has sought to refocus Novartis since taking the helm in 2018, spinning off its eye-care unit and last week unveiling a strategic review for its generics division Sandoz, which could include a sale. It has said it will provide an update by the end of next year.

SoftBank this year acquired a stake worth about $5bn in Roche.

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