Novartis AG agreed to sell its stake in Roche Holding AG back to its rival for $20.7 billion, ending a two-decade holding that linked the two Swiss drugmakers.
The price for each carrier share is 356.93 Swiss francs ($391), Novartis said Thursday. This is 13% lower than the previous closing price.
Novartis said it would have about $14 billion in capital gains on the investment, which it no longer considers a strategic asset. The stake is the remnant of a failed attempt 20 years ago by then-Novartis CEO Daniel Vasella to persuade Roche to merge.
The company owns 33% of Roche’s voting shares, and Novartis has earned a 10% annual profit on them over the past two decades.
The gap between Roche bearer shares hit a 10-year high against non-voting shares in September.
Roche said the transaction will increase the voting power of Roche’s family pool to 67.5%. The family will not participate in pool shopping. Meanwhile, the company’s percentage with the public will increase from 16.6% to 24.9%.
This story has been published without modification in text from a wire agency feed.
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