Swiss Pharmaceutical major, Novartis is to transfer the over-the-counter (OTC) division of its Indian arm Novartis India to GlaxoSmithKline Consumer, the Indian company belonging to the UK-based GlaxoSmithKline for a consideration of Rs.109.73 crore. The board of directors of Novartis India approved the transfer of the OTC division to GlaxoSmithKline Consumer Pvt. Ltd (GSKCPL).
This is part of the global portfolio transformation signed between Novartis AG, Switzerland and GlaxoSmithKline plc UK in April 2014 to create a global consumer healthcare joint venture company. GSK plc will hold 63.5 per cent in the joint venture with Novartis AG holding the balance 36.5 per cent.
A statement from Novartis said “the Board approved on January 13, 2015, the transfer of the OTC division as a going concern by way of a ‘slump sale’ to GSKCPL (an affiliate of GSK) for a consideration of Rs. 109.73 crore, on or before October 22, 2015.’’ The deal is subject to receipt of all approvals as well as closing of the global joint venture between Novartis AG and GSK.
Novartis said factors considered by the board in its consideration of the OTC transaction were the prospects for the company’s OTC business in India following the divestment of Novartis AG’s global OTC business, including all of Novartis AG’s major OTC patents, trade-marks and R&D assets.
The valuation for the transfer of the OTC division has been affirmed in a report provided by an independent valuer and its fairness has been confirmed in separate opinions by two leading merchant bankers, Novartis’ statement said.
