Novartis - Readying Itself for GSK Bid? (BUY, TP CHF97 [90], 15 pgs)
We discuss whether Novartis is readying its war chest for a large merger. Novartis has shed ~$100bn of assets since 2014 & by the end of 2023 will be almost net cash. Recent rumours of a respiratory divestment has led us to explore what a GSK acquisition would look like for Novartis. Re-entering Vaccines & entering Virology with world-leading franchises would help diversify away from the crowded and increasingly risky oncology space. The deal could be >40% accretive & all cash with pro forma net debt falling to 2.4x EBITDA by 2025. We also show how the politics could be relatively easily managed.For access to the full note, please contact Naresh Chouhan ( )
GlaxoSmithKline is a global healthcare company. Co.'s segments include: Pharmaceuticals; Vaccines; and Consumer Healthcare. The Pharmaceuticals segment is focused on developing new medicines in respiratory, HIV, oncology and immuno-inflammation, with discovery research exploring these and other areas. The Vaccines segment has a portfolio and pipeline of vaccines to help protect people throughout life. Co. delivers vaccines to people living in over 160 countries. The Consumer Healthcare segment develops and markets consumer-preferred brands in oral health, pain relief, respiratory, nutrition/gastro-intestinal and skin health.
Novartis is a multinational healthcare group based in Switzerland. Co. provides healthcare solutions that address the evolving needs of patients and societies worldwide. Co.'s broad portfolio includes innovative medicines, eye care products and cost-saving generic pharmaceuticals. Co.'s operations are organized along three operating divisions: Innovative Medicines Division; Sandoz Division; and Alcon Division. Co.'s operations are supported by the Novartis Institutes for BioMedical Research and Novartis Business Services.
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