Novartis Proposes Spin-Off of Generic Medicines Division
Novartis, a Swiss pharmaceutical company, has announced its plan to spin off its generic medicines division. The company has proposed offering shareholders one Sandoz share for every five Novartis shares. The spin-off is expected to take place on or around October 4.
In a statement, Novartis invited shareholders to attend an extraordinary general meeting on September 15, where the proposed spin-off will be discussed. The company’s board of directors has unanimously endorsed and recommended the spin-off.
If approved by Novartis shareholders at the meeting, the spin-off will be implemented through the distribution of a dividend-in-kind of Sandoz shares to Novartis shareholders. Novartis ADR holders will also receive Sandoz ADRs (American Depositary Receipts).
Sandoz, the generic medicines division, contributed approximately 10% to Novartis’ group core operating profit of $16.7 billion in 2022. The decision to spin off Sandoz came after Novartis CEO Vas Narasimhan conducted a strategic review in 2021, prompted by increasing pricing pressures in the U.S. off-patent drug sector.
In August 2022, Novartis officially announced its plans for the spin-off.
