Novartis AG To Spin-Off Sandoz Business In 4Q23

Deal Overview

On July 18, 2023, Novartis AG (NYSE: NVS, $105.01, Market Capitalization $239.2 billion), a leading global medicine company, announced that its Board of Directors has unanimously endorsed the proposed separation of Sandoz to create an independent company by way of a 100% spin-off. Earlier on August 25, 2022, Novartis revealed its intention to separate Sandoz, the generics and biosimilars division, into an independent publicly traded company through a 100% spin-off. This decision was a culmination of an extensive strategic review started in October 2021, which considered all options, ranging from retaining the Sandoz business to separation. The review concluded that a spin-off would be in the best interests of Novartis shareholders. The transaction is expected to be tax neutral to Novartis, subject to the receipt of favorable opinions and rulings. Sandoz will be listed on the SIX Swiss Exchange, with an American Depositary Receipt (ADR) program in the US. In the next step, Novartis shareholders will be invited to vote on the proposed spin off and a related reduction of Novartis AG’s share capital during an Extraordinary General Meeting scheduled for Friday, September 15, 2023. The invitation to the EGM, along with a Shareholder Brochure and listing prospectus prepared by Sandoz, is planned to be distributed in August 2023. The planned spinoff is expected to be completed in early 4Q23 if all approvals are secured.