Novartis has announced a definitive agreement to divest its medical nutrition business unit to Nestlé for USD 2,525 million. This transaction, which requires customary regulatory approval is expected to be completed in the second half of 2007.
"Following our long-term strategy, this divestment continues to enhance our focus on healthcare, further strengthens our financial position and provides strategic flexibility," said Dr Daniel Vasella, chairman and CEO of Novartis. "We also believe that this transaction offers the ideal fit for the Medical Nutrition business and the best opportunities for Medical Nutrition associates and management."
Medical Nutrition, a business unit of the Novartis consumer health division, is the No 2 global supplier of enteral nutrition, oral nutrition and medical devices used to provide essential nutrients to patients with special medical conditions. These products are often required when illness or disabilities limit the ability of patients to eat a balanced diet.
Based in Gland, Switzerland, medical nutrition is active in over 40 countries and has about 2,000 employees. This business is expected in 2006 to generate approximately USD 950 million in net sales and approximately USD 90 million of operating income on a reported basis.
Proceeds from this transaction will further strengthen the financial position as well as provide additional strategic flexibility. Novartis is one of the few non-financial companies worldwide to have the highest rating from credit agencies.