Novartis Sells Blood Transfusion Testing Unit

Novartis (Basel, Switzerland) has agreed to sell its blood transfusion testing unit to Grifols (Barcelona, Spain) for USD 1.68 billion, creating a significant expansion for the Spanish company’s diagnostics business.

The sale is seen as the first move by Novartis in a long-awaited restructuring of operations following the departure of veteran chairman and one-time CEO Daniel Vasella, who created Novartis in 1996 by merging Ciba-Geigy and Sandoz. Other potential sell-offs include smaller Novartis units, including vaccines and diagnostics, over-the-counter (OTC) products, and animal health, as a result of a strategic decision by the company to only retain businesses that are among world leaders.

For Grifols, the world's third-largest blood products maker, the acquisition means diagnostics will now make up 20% of its revenue (up from 4%), based on a predicted annual turnover in the diagnostic of around USD 1 billion per annum. The blood-screening technology will also help expand Grifols's core business of converting blood plasma into an array of sophisticated medicines sold worldwide. The deal follows a previous purchase by Grifols of Talecris Biotherapeutics Holdings in 2010 for USD 4 billion including debt. The company did not rule out further acquisitions.

“The sale of the Novartis blood transfusion diagnostics unit enables us to focus more sharply on our strategic businesses while providing Grifols with a platform for global expansion,” said Joseph Jimenez, CEO of Novartis. “I am especially pleased that the agreement with Grifols provides our associates with an opportunity to join a company that will focus on growing this business aggressively.”

“They had identified its blood diagnostics unit as non-core, while we wanted to grow our business and boost our geographic footprint,” said Nuria Pascual, deputy chief financial officer of Grifols. “Grifols will continue to explore new smaller acquisitions in an opportunistic way as our leverage ratio will remain under control.”

The purchase agreement does not include the Genoptix unit, part of the Novartis pharmaceuticals division that is focused on developing and commercializing evidence-driven diagnostic tests to improve physicians' ability to optimize patient outcomes.

Related Links:
Novartis
Grifols