Novartis AG announced that it would sell its voting stake in Roche to its rival for $ 20.7 billion, a deal that unlinks two pharmaceutical companies that were intertwined by investment for two decades.
The deal frees Roche from ownership ties with a major competitor that has strategic veto power, but has maintained a passive role vis-à-vis powerful family shareholders. Roche.
The announcement sent Roche shares reaching an all-time high. In the middle of the session, they rose 2.4%, while the shares of Novartis they were up 0.2%.
Novartis has agreed to sell 53.3 million Roche bearer shares at US $ 388.99 (356.93 Swiss francs) per share, a price that reflects the volume-weighted average of Roche’s non-voting share certificates over the 20 trading days. until Nov. 2, Novartis said in a statement.
In another statement, Roche stated that it will use debt to finance what it called a “separation of two competitors”And that it plans to reduce its capital by canceling the repurchased shares to regain full strategic flexibility.
A spokesperson for Roche told Reuters the company’s balance sheet remained strong after the deal. “We can continue with our M&A strategy as before, there are no limitations in that regard.”.
The implication of Novartis It began in 2001, when Swiss activist investor Martin Ebner, known for orchestrating the merger that led to the banking giant UBS, offered his stake in Roche to his rival out of frustration at the rejected proposals.
Ebner had then built up his stake in Roche to drive strategic change, but ran into opposition from the founding families that control the group. Roche shareholders will vote on the plan at an extraordinary general meeting on November 26.
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