European Regulators Approve GSK/Novartis Business Swap

European regulators approved a complicated three-part transaction that would see Novartis and GlaxoSmithKline swapping parts of their companies and creating a consumer healthcare joint venture.

Under the terms of the deal, GSK would acquire all of Novartis’ vaccine business for $5 billion, except its influenza vaccines, while selling its oncology portfolio for $16 billion, including R&D activities and rights to two pipeline products to treat cancer, to Novartis.

Novartis’ vaccine portfolio, which includes the meningitis vaccine Bexsero and another in late-stage development, will put the British drugmaker near the top of the vaccines market, GSK spokeswoman Mary Anne Rhyne said.

GSK expects the vaccine business will be a growth area; generating 10 percent growth per year over the next decade, she said. It will also increase GSK’s global network, giving the company new manufacturing sites in India and China, as well as packaging and supply facilities in Rosia, Italy, and Marburg, Germany.

The third part of the deal is a joint venture between the two companies to sell their OTC products, with popular names such as Excedrin and Panadol.

The companies have agreed to a number of divestments in order to maintain a competitive market, Rhyne said. GSK, for example, agreed to sell two of its meningitis vaccines, which brought in $54.5 million in 2013. It also agreed to divest two Novartis diphtheria and tetanus vaccines in Italy and Germany.

Novartis expects the deal to close sometime in the first half of this year, spokeswoman Julie Masow said. — Lena Freund