Private Equity firms mull co-bidding for Novartis generics arm

SWITZERLAND – Two private equity giants are discussing launching a joint bid for Novartis’ generics unit, Bloomberg has reported.

Novartis announced last year that it was conducting a strategic review of the arm, and a number of private equity firms are now said to be circling.

Novartis boss Vas Narasimhan said in early January: “No decision has been taken on Sandoz; we continue to evaluate the options.

Vas Narasimhan, CEO of Novartis, confirmed in December that the company has received unspecified M&A interest, though no hard offers have been made.

Blackstone Inc. and Carlyle Group Inc have discussed collaborating to launch a bid for the Swiss drugmaker's Sandoz generics arm, which could be valued at US$25 billion (£18.5 billion).

In October, the CEO signaled a plan to conduct a strategic review of Sandoz to determine whether the generics division should remain within Novartis or be sold or spun off into an independent company.


Generic drug prices have remained under intense pressure, and a Novartis consumer division spin-off would follow similar moves by Merck and Pfizer, while GSK is looking to spin off its consumer division as a separate business.

Last year, Johnson & Johnson also announced plans to establish a new company to house its consumer products.

Sandoz made US$9.7 billion in sales last year, and Handelsblat reported in November that the arm was up for sale for US$21.6 billion, by the billionaire Strüngmann brothers.

This would not be the Strüngmanns’ first rodeo; in 2005, they sold Hexal to Novartis.

What is clear is that we want to focus Novartis primarily on innovative medicines,” Narasimhan told reporters late last year.

We generate 80% of our sales and 80 to 90% of our profits with new medicines, for example for cancer, cardiovascular problems or genetic diseases.”

A US$25 billion deal would dwarf last year’s most expensive biopharma acquisition, CSL’s US$11.7 billion deal for Vifor Pharma.

Mergers and acquisitions in the biopharma sector has slowed significantly since a wave of mega-deals in 2019, including AbbVie’s US$63 billion acquisition of Allergan and Takeda’s roughly US$62 billion takeover of Shire.

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