Novartis AG said it would sell its voting stake in Roche to its rival for $ 20.7 billion. An operation that disassociates two pharmaceutical companies that were intertwined by investment for two decades.
The announcement sent Roche shares reaching an all-time high. Mid-session, they were up 2.4%, while Novartis shares were up 0.2%.
Today’s announcement is consistent with our strategic approach
Novartis has agreed to sell 53.3 million Roche bearer shares at $ 388.99 per share. A price that reflects the volume-weighted average of Roche’s non-voting share certificates over the 20 trading days through Nov. 2, Novartis said in a statement.
“After more than 20 years as a Roche shareholder, we concluded that now is the right time to monetize our investment.” Stated Vas Narasimhan, CEO of Novartis. “Today’s announcement is consistent with our strategic approach and we intend to distribute the proceeds of the transaction in accordance with our capital allocation priorities to maximize shareholder value and continue to reinvent medicine,” he added.
Roche indicated that the purchase of these 53.3 million securities at $ 388.99 per share will be financed through the issuance of debt. In addition, it has added that it intends to cancel the acquired shares once the transaction is completed. In addition, he pointed out that the percentage of shares in free float will increase from the current 16.6% to 24.9% with the cancellation of the Novartis shareholding, all of which will allow Roche’s shares to be included in the Swiss Performance Index (SPI ) and possibly other indexes.
Novartis profit rises 30% until September
On the other hand, Novartis reported that in the first nine months of 2021 it obtained a net profit of 7,712 million dollars (6,632 million euros). This is an improvement of 29% compared to its accounts for the same period of 2020. In the third quarter of the year, Novartis registered a net profit of 2,758 million dollars (2,372 million euros), 42.7% more.
Novartis reported that in the first nine months of 2021 it obtained a net profit of 6,632 million euros.
Between January and September, the laboratory increased its turnover by 7%, to 38,397 million dollars (33,020 million euros), including an improvement of 6.3% in the third quarter, when its sales totaled 13,030 million dollars (11,205 million of euros).
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