Investing
Bumper payout for fund managers as Novartis buys Glaxo business
GlaxoSmithKline, the UK’s largest pharmaceutical group, has agreed to sell one of its businesses to rival Novartis, in a deal which will see it return billions of pounds to shareholders.
The group – a favourite holding of many income funds in the UK – announced on Tuesday it had sold its oncology unit to Swiss rival Novartis for an initial sum of $14.5bn (£8.63bn).
In a multi-faceted agreement, Glaxo will also buy Novartis’ vaccines business for $7.1bn, while the pair will embark on a joint venture in the consumer healthcare market where both already have a strong presence.
The deal – which should complete in the first half of next year – will boost Glaxo’s earnings per share, it said, while it will also provide a bumper payout to shareholders.
Glaxo said £4bn would be returned to shareholders after the deal completes.
