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ZURICH (Reuters) – Novartis ( NOVN.S ) plans to sell its Alcon eye care business to shareholders and buy back up to $ 5 billion of stock, then that the general director Vas Narasimhan refocuses the Swiss company on prescription drugs.
Narasimhan, a doctor American-trained Harvard, He said on Friday that it was premature to give an estimate for Alcon, based in the United States, that Novartis bought for $ 52 billion in 2011, although its predecessor Joe Jimenez l 39 estimated between $ 25 and $ 35 billion.
Alcon, a surviving legacy of former Novartis boss Daniel Vasella, could be worth between $ 15 billion and $ 23 billion, analysts at Bank Vontobel said, adding that his recovery was going to influence the final price.
Novartis had to make massive investments to reverse the drop in sales and losses at Alcon, even though its turnover is growing again and it has recorded a profit of $ 50,000. $ 90 million in the first quarter.
Novartis is planning a shareholder meeting in February 2019 to get approval for the split, which is expected to be completed in the first half of next year, while the share buyback should be completed. from here the end of next year.
Novartis shares were up 2.9% at 07:57 GMT, with investors welcoming the Alcon split and the share buyback.
Narasimhan continues to move forward with Jimenez's reversal of the decade's expansion under Vasella, the former CEO and president. (reut.rs/2KvMKPK)
Since Vasella's departure in 2013, Novartis has discontinued vaccines, abandoned its animal health business and, earlier this year, unloaded its joint venture for consumer health with GlaxoSmithKline ( GSK.L ) about 13 billion dollars.
"A company like ours needs to focus its capital on our field of strength, which I believe is breaking new ground in world-class medicines, and I want to strengthen our strength in digital and data technologies," Narasimhan told reporters. journalists.
NARASIMHAN ACHIEVEMENTS
Since last year, Novartis has bought the American Avexis for $ 8.7 billion and Advanced Accelerator Applications based in France for $ 3.9 billion, giving it a platform in gene therapy and radiopharmaceutical respectively.
Novartis also invested in digital technology, including a mobile app to collect data on eye diseases.
Alcon manufactures surgical equipment to treat cataracts and contact lenses, businesses that no longer fit Novartis's prescription drug plan.
Novartis will retain its prescription ophthalmic drug portfolio of approximately $ 3.6 billion, which it previously transferred from Alcon to its main pharmaceutical unit.
Narasimhan chose to unload business on shareholders, according to the company's preferred option, after a review and Novartis will not keep any Alcon shares, he said.
A listing is scheduled for New York and Zurich, with Alcon's current director, Mike Ball, becoming president, while David Endicott will become Alcon's CEO.
The share buyback will be partially funded by proceeds from the sale of OTC to GSK, Narasimhan said.
The Alcon split is a welcome diversion from a political scandal in the United States triggered by Novartis paying $ 1.2 million in fees to President Donald Trump's personal attorney.
Narasimhan called the error payments, and the fury cost Novartis' best lawyer his job.
Report by John Miller, edited by John Revill and Alexander Smith
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