Novartis To Offload Its Stake Back To Roche For $20.7B

Novartis AG NVS, a shareholder in Roche Holdings AG RHHBY for more than 20 years, would sell its entire stake, which is nearly one-third voting stake in Roche for $20.7 billion.
The deal means that Novartis will give up its influence over strategic decisions taken by Roche.
Novartis has agreed to sell 53.3 million Roche bearer shares for $388.99 (CHF 356.93) per share, a price that reflects the volume-weighted average of the Roche non-voting equity certificates over the 20 trading days to November 2.
In a separate statement, Roche said it would use debt to finance the deal and plans to reduce its capital by canceling the repurchased shares to regain "full strategic flexibility."
Roche shareholders will vote on the plan at an extraordinary general meeting on November 26.
Novartis CEO Vas Narasimhan said now was the right time to monetize the investment.
"Today's announcement is consistent with our strategic focus, and we intend to deploy the proceeds from the transaction in line with our capital allocation priorities," said Vas Narasimhan.
Novartis said the investment acquired for around $5 billion in 2001 and 2003 had delivered recurring earnings contributions and cumulative dividends of over $6 billion.
The transaction will not change control as the founding families' shareholder pool already held the majority of the votes, it said. Its voting power will increase to around 67.5% following the deal.
Price Action: NVS shares are up 0.17% at $83.73, while RHHBY stock is up 0.76% at $50.45 during the premarket session on the last check Thursday.

Market News and Data brought to you by Benzinga APIs

Comments

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga