Drug giants Novartis and GlaxoSmithKline (GSK) are set to enter into a partnership deal to launch a joint venture.
Novartis is to acquire GlaxoSmithKline’s cancer drugs business for $16bn (£9.5bn). GSK in turn is buying up Novartis’ vaccines division, excluding the flu unit, for $7.1bn.
“The transactions mark a transformational moment for Novartis,” Joseph Jimenez, chief executive of Novartis, said in a statement.
“They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”
“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce,” Andrew Witty, chief executive, of GSK, said in a statement.
“With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.”
In a statement, GSK also said that the transaction “would increase overall GSK revenues by £1.3bn to £26.9bn”.
In a separate deal, Novartis agreed to sell its animal health division to Lilly for nearly $5.4bn.