Novartis to Sell Majority Stake in India Unit for Rs 1,446 Crore

Swiss based pharmaceutical company Novartis declared its intention to divest its entire 70.68 percent share in its Indian subsidiary, Novartis India, at a cost of Rs 1,446 crore, approximately 159 million dollars.

The stake will be purchased by a consortium of WaveRise Investments, ChrysCapital and Two Infinity Partners. This action will be included in the larger strategic effort of Novartis to simplify its worldwide portfolio and concentrate on its main therapeutic domains.

In accordance with takeover regulations, the consortium has also offered to acquire an extra 26 percent of the stakes of the public shareholders in Novartis India. The bid will cost Rs 860.64 per share and this is a 3.6 percent premium to the closing price of Novartis India, which assures shareholders an attractive exit.

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We can expect that Novartis India, which has been a major force in the Indian pharmaceutical market, would now experience drastic changes, particularly in the future growth pattern and market practices under the new ownership. The sale might result in a new preference for certain lines of products or a new strategy to attract market share in the Indian market.

This acquisition is also an indication of the ongoing optimization process by Novartis to make more focused investments. To the Indian investors, this is a buyout offer, and it would enable them to evaluate their share ownership in the firm, especially when the premium has been put on the table.