Novartis sells blood transfusion test unit to Grifols for $1.7 billion
By Silke Koltrowitz and Sarah White
ZURICH/MADRID (Reuters) - Switzerland's Novartis has agreed to sell its blood transfusion testing unit to Spain's Grifols for $1.68 billion, in an increasingly buoyant market for healthcare deals.
The sale comes as Novartis carries out a broad review of operations following the departure of veteran chairman and one-time CEO Daniel Vasella, the architect of the merger of Ciba-Geigy and Sandoz that created Novartis in 1996.
The acquisition will give critical mass and a significant U.S. presence to Grifols' previously small diagnostics business, which in future will account for a fifth of its revenues.
The healthcare industry is undergoing a wave of mergers and acquisitions as large drugmakers shed non-core activities, while simultaneously trying to bolster their new drug pipelines by buying up smaller firms.
Current Novartis Chief Executive Joe Jimenez and new Chairman Joerg Reinhardt have both stressed they will only hang on to businesses that are among world leaders.
Jimenez said on Monday he started the review of Novartis's businesses - including the blood unit which carries out tests to ensure blood transfusions do not contain infections - in the spring and the matter had gone to the board over the summer.
He said other potential sell-offs were possible as Novartis examines whether three sub-scale businesses - vaccines and diagnostics, over-the-counter (OTC) products and animal health - have a long-term future in the group.
"We need to have global scale in these businesses and right now we're in that process of gaining scale or considering other options for these businesses," he said in an interview. Continued...