“This is about getting us into fighting shape for the next 10 years,” Novartis’s chief executive Joseph Jimenez told The New York Times. Novartis is also selling its animal health division to Eli Lilly for more than $5 billion, according to The Guardian.
“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce,” GSK CEO Andrew Witty said in a statement. “With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders."
Shares in both companies rose upon announcement of the deals on Tuesday: GSK added 5 percent, Novartis added 2 percent.
The announcement of Novartis’s and GSK’s extensive transactions comes during a busy year for such wheeling and dealing in the pharmaceutical sector. Earlier this year, Irish drug maker Mallinckrodt Pharmaceuticals bought Questcor Pharmaceuticals for $5.6 billion in cash and shares, and acquired Cadence Pharmaceuticals of San Diego for about $1.4 billion. And health-care company McKesson Corporation took over German pharmaceutical wholesaler Celesio for more than $5 billion.