Novartis AG announced on Thursday it had completed the $5.4-billion sale of its animal-health division to Eli Lilly & Co.
The closing of the deal is in line with the April-announced plan of the Basel-based drug giant to focus Novartis effort on its three leading businesses of global scale: innovative pharmaceuticals, eye care, and generics.
The transaction is valued at approximately $5.4 billion and it will result in exceptional pre-tax gain of approximately $4.6 billion during the first quarter in 2015, Novartis said. The sold beauty unit, reported 2013 net sales of around $1.1 billion and an $0.9 billion during the third quarter of 2014.
Jeff Simmons, president of Eli Lillys Elanco animal-health business, remarked “our combination will deliver a more comprehensive suite of existing solutions, but will also allow us to dedicate greater resources to new product discovery and development.”
Indianapolis-based Eli Lilly’s animal-health division has been expanding its operations through a series of acquisitions and for the full-year of 2013 it reported sales of $2.15 billion.
The sale is a part of Novartis plan to focus on its core businesses. The company boosted its cancer treatment portfolio by purchasing the oncology unit of GlaxoSmithKline for about $14.5 billion. Additionally the two companies reached a deal, under which Glaxo is paying $5.25 billion for Novartis’s vaccines unit.
Novartis and Eli Lilly will also join operations of their over-the-counter drug divisions, however, the businesses will be managed by Glaxo.
Novartis Group, with more than 130 000 employees across 150 countries around the world, reported net sales of $57.9 billion.
Novartis AG lost 0.65% on Tuesday and closed at CHF 92.35, marking a one-year increase of 29.71%. The company is valued at CHF 251.21 billion.
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