Swiss pharmaceutical firm Novartis has announced the completion of the spinoff of its generics and biosimilars business. Starting from Wednesday, the division will trade separately under the name Sandoz.
This move is just one of several corporate spin-offs that have taken place this year. Novartis aims to streamline its operations and focus more on its core drug research and development business.
Novartis CEO, Vas Narasimhan, explained that over the past six years, the company has made significant efforts, including transactions totaling more than $100 billion, to exit other businesses. These measures have enabled Novartis to become a “pure-play innovative medicines company.” The company’s primary objective is to bring their research and development efforts, as well as the new medicines they create, to global markets.
Shares of Sandoz Group AG will trade on the SIX Swiss Exchange with the symbol “SDZ.” Additionally, its American depositary receipts will be available for trading on OTCQX. Following the spinoff, Sandoz will also be included in Swiss indexes such as the Swiss Performance Index (SPI) and Swiss Leader Index (SLI).
Novartis to Spin Off Sandoz Division
Novartis, one of the world’s top pharmaceutical companies, is set to spin off its Sandoz division in a move that follows a trend among major pharma players. Since taking over in 2018, CEO Narasimhan has been streamlining Novartis’ operations with a focus on pure-play strategies.
As part of this strategy, Novartis previously sold its consumer-health joint venture to GSK for an impressive $13 billion. The company also spun off its eye-care business as Alcon. In 2014, Novartis had already divested its animal health business to Eli Lilly.
The spinoff has already been approved by shareholders on September 15th. Novartis’ shares have seen a 9.7% increase this year and a substantial 27% over the past twelve months.
This move comes in a year filled with corporate spin-offs. Johnson & Johnson separated its consumer health division in August, while cereal and breakfast food maker WK Kellogg recently split from the former Kellogg entity. The snack business then renamed itself Kellanova, retaining the familiar “K” ticker symbol.
The completion of the Sandoz spinoff will be achieved through a dividend-in-kind approach. This means that every Novartis shareholder will receive one Sandoz share for every five Novartis shares, and the same goes for Novartis ADR holders.
Novartis’ decision to spin off Sandoz aligns with their ongoing efforts to focus on their core pharmaceutical business. As the company continues its strategic transformation, this move is expected to further enhance Novartis’ position in the global pharmaceutical market.
Novartis Shareholders to Receive Cash for Fractional Interest
Novartis, the renowned pharmaceutical manufacturer, has announced that both its shareholders and ADR holders will be receiving cash payments for every fractional interest they hold. This initiative ensures that every investor’s stake is appropriately compensated.
The recent spinoff undertaken by Novartis is projected to be tax-neutral, benefitting both Swiss tax and U.S. federal income tax purposes. This strategic maneuver aims to optimize the financial outcomes for shareholders while maintaining compliance with regulatory frameworks.
