GlaxoSmithKline and Novartis have completed a series of asset swaps worth more than $20 billion. As Grace Pascoe reports they say the deal will reshape both drugmakers.
There've been several big pharmaceutical takeovers in recent months. But the latest $20bln deal between Britain's GlaxoSmithKline and Switzerland's Novartis is no merger. The two drugmakers have completed a series of asset swaps aimed at reshaping both their businesses. GSK is buying Novartis' vaccines business and Novartis is taking on GSK's cancer drugs portfolio. They're also forming a joint consumer health venture. Jeremy Stretch is from CIBC... (SOUNDBITE) (English) CIBC, HEAD OF FX STRATEGY, JEREMY STRETCH, SAYING: "Clearly it is attracting a great deal of attention, not least of which because of the completion of the deal will see fairly sizeable investor flows going back to GSK shareholders. But I think it just underlines the fact that of the big drug companies there is a degree of specialisation going on. So moving away perhaps from a big pharma and covering a whole range of subjects and possible areas." It's a critical time for GSK with new chairman Philip Hampton joining in May. Last year the company faced a record fine of almost $500 million for bribery in China. The asset swap will give GSK shareholders a reason to celebrate at last as 4 billion pounds will be returned to them. Novartis investors too will welcome the deal as core margins are expected to get a lift and its already substantial presence in cancer treatment will be boosted. \\\\\\\\\\\\\\\\\\\