Novartis hits acquisition trail
Swiss pharmaceuticals giant Novartis is set to become the world’s biggest maker of generic drugs after today announcing the details of an acquisition spree worth €5.65bn.
Basel-based Novartis has agreed to buy Germany’s Hexal and a majority stake in United States-based Eon Labs.
Novartis currently employs more than 400 people in its manufacturing facility in Ringaskiddy, Co Cork and in Dublin, as well as more than 3,000 people in the UK.
The deals will allow the firm to cash in on increasing demand for generic drugs – cheaper copies of branded rivals – which can be produced once the patent on the original treatment expires.
The news lifted shares in the UK in drugs firms GlaxoSmithKline, AstraZeneca and Shire Pharmaceuticals as investors warmed to consolidation in the sector.
Novartis employs 81,400 people in more than 140 countries.
The company expects cost savings of $200m (€153.2m) within three years of the deals being completed and becoming part of its Sandoz generics division.
Dr Andreas Rummelt, chief executive of Sandoz, said: “We will create a highly competitive leader with a comprehensive global presence and the expertise necessary for success in the rapidly changing generics market.”
The company is buying 67.7% of Eon Labs but has also offered to buy the remaining shares for $31 each.
