Glaxo will snap up the 36.5% stake to take full ownership of the division just a week after it pulled out of the bid auction for US group Pfizer’s consumer healthcare business amid a shake-up in the sector.
The companies only launched the joint venture in 2015, but Swiss group Novartis said the deal was at an “attractive price”, while Glaxo said it would allow the group to “capture the full value” of the business.
Glaxo added it is now considering putting its malted drinks brand Horlicks up for sale as part of a review of consumer nutrition products to help fund the deal with Novartis.
The review will also include its 72.5% stake in its Indian subsidiary GlaxoSmithKline Consumer Healthcare.
Glaxo said the products under review make sales of around £550 million a year, with the bulk generated in India.
Emma Walmsley, chief executive of Glaxo, said the Novartis deal will see shareholders “capture the full value of one of the world’s leading consumer healthcare businesses”.
She added it will also help the group “accelerate efforts to improve performance”.
“Most importantly it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals R&D,” she said.
Newly appointed Novartis boss Vas Narasimhan, who took on the role in February, said: “While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price.”
The deal is expected to complete in the summer.