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Novartis to sell stake back to Roche for $20.7 billion

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 is 356.93 Swiss francs ($391) for each bearer share, Novartis said Thursday. That’s 13% lower than the last closing price. 

Novartis said it will have a capital gain of about $14 billion on the investment, which it no longer considers a strategic asset. The stake is a remnant of a failed attempt 20 years ago by then-Novartis CEO Daniel Vasella to nudge Roche into a merger.

The company owns 33% of Roche’s voting shares, and Novartis has made a 10% annual gain on them over the past two decades.

The gap between Roche bearer shares reached a 10-year high against non-voting shares in September.

The transaction will increase the voting power of Roche’s family pool to 67.5%, Roche said. The family pool won’t participate in the purchase. Meanwhile, the percentage of the company held by the public will increase from 16.6% to 24.9%.

This story has been published from a wire agency feed without modifications to the text.

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