APR 26, 2016
Swiss-based drugmaker Novartis is considering shedding its 6% stake in rival Roche to potentially provide cash for new deals, according to a report from Reuters.
The world's biggest prescription drugmaker started building up its one-third voting stake under former chairman and CEO Daniel Vasella more than a decade ago as a basis for a possible merger that never materialized.
Though a deal is not imminent, board and banking sources say Novartis plans to sell its stake in a so-called order book process in which banks collect purchase offers within a predefined price range from selected investors. This will allow Novartis to ensure the buyers would be acceptable to Roche. Novartis also considered swapping its shares back to Roche, but Roche has shown little interest in this idea and has traditionally viewed share buybacks a low priority.
The sale could also make sense for current Novartis CEO Joseph Jimenez, who is under pressure to revitalize its healthcare business following recent difficulties, especially with the company's eye care unit Alcon.
Both Novartis and Roche declined to comment on the report.