Novartis to sell Roche shares back to the company for $20.7bn

4 Nov 2021

Image: © Taljat/

CEO Vas Narasimhan said ‘now is the right time’ for Novartis to sell Roche shares and monetise its long-held investment.

Pharmaceutical giant Novartis is selling $20.7bn worth of bearer shares back to Roche after investing in the rival company for more than two decades.

Roche agreed to buy the shares, subject to approval from its shareholders, at a price of $388.99 per share, and Novartis said it will report gains of approximately $14bn from sale of the stake.

Novartis CEO Vas Narasimhan said that the sale of Roche shares after more than 20 years as a shareholder was done at the “right time” to monetise its investment.

“Today’s announcement is consistent with our strategic focus, and we intend to deploy the proceeds from the transaction in line with our capital allocation priorities to maximise shareholder value and continue to reimagine medicine.”

The two Swiss companies are among the world’s largest pharmaceutical businesses. Both are headquartered in the Swiss city of Basel and are often seen as competitors.

Sale of the shares will not result in a change of control within Roche, as the pool formed by shareholders of the founding families has held most of the votes represented at general meetings. This is set to increase to 67.5pc after the transaction is completed.

“I am convinced that the envisaged transaction is in the best interest of Roche and the holders of Roche equity securities from a strategic and economic perspective,” said Christoph Franz, chair of Roche’s board of directors.

The percentage of shares held by the public will increase from 16.6pc to 24.9pc after the transaction as the equity stake previously held by Novartis will be cancelled, allowing the shares to be included in the Swiss Performance Index and possibly other indices.

“As a result, Roche will be even better positioned strategically in the future to provide life-saving medicines and diagnostics to people around the world,” Franz added.

Roche said it is expecting mid-single digit sales growth in its outlook for 2021 and is aiming to increase its dividend for the year. The pharma company has an office in Dublin and acquired Irish start-up Inflazome last year.

Novartis is one of the leading employers in Ireland’s healthcare industry since its entry in the country in the 1950s. It currently employs 1,400 people across three locations in Cork and Dublin.

In September, Bertrand Bodson, who was the chief digital officer at Novartis, joined Dublin-based game developer Keywords Studios as its new CEO.

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Vish Gain is a journalist with Silicon Republic