Novartis Muscles In As Sandoz And Ciba Merge

11 March 1996

In a "merger of equals," which brought merger mania back to boiling point in the world drug industry as the Market-letter went to press, the Swiss chemical and pharmaceutical firms Sandoz and Ciba are forming a new company, Novartis, believed to have a market capitalization of around $60 billion. This puts it among Merck & Co, Roche and Glaxo Wellcome at the top end of the drug industry ranking.

Sandoz and Ciba are claiming that Novartis captures the number one position worldwide in life sciences, with core businesses of pharmaceuticals, agribusiness and nutrition. The specialty chemicals division of Ciba will be demerged within a 12-month time frame with a listing on the Swiss stock exchange, and Sandoz' construction chemicals business will be demerged or sold. This will result in health care representing 59% of Novartis' business, agribusiness 27% and nutrition 14%.

Alex Krauer, Ciba's chairman, is to head up Novartis as chairman, and Daniel Vasella, chief executive of Sandoz Pharmaceuticals, will be president and head of the executive committee.

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