Novartis sells joint venture stake to GSK for $13 billion

GENEVA (AP) - Swiss pharmaceutical firm Novartis is selling its stake in a consumer health care joint venture with GlaxoSmithKline to the British company for $13 billion.

The joint venture was formed in 2015 and Novartis holds a 36.5-percent stake. Novartis CEO Vas Narasimhan said in a statement Tuesday that it "is progressing well," but "the time is right for Novartis to divest a non-core asset at an attractive price."

Novartis said the sale will be a cash transaction, and is subject to the approval of GSK shareholders. The four Novartis-appointed directors on the joint venture's 11-member board will step down when the sale is completed.

GSK said the original joint venture agreement gave Novartis the right to require GSK to buy all or part of its stake at any point between March 2 this year and 2035. It said that put option created "inherent uncertainty" for its financial planning.

"The new agreement to buy out Novartis' stake removes this uncertainty and improves the group's ability to plan allocation of capital to its other priorities," GSK said.

It added that it is initiating a strategic review of Horlicks and other consumer health care nutrition products, the majority of whose sales are in India, "to support funding of the transaction" among other things. The review will include an assessment of GSK's 72.5 percent holding in GlaxoSmithKline Consumer Healthcare Ltd., which sells the products in India.

The GSK consumer health care business had sales of 7.8 billion pounds ($11.1 billion) last year.