Novartis may be on the verge of separating itself from Sandoz amidst an industry-wide effort by Big Pharma to sell off its generics and consumer operations. According to German publication Handelsblatt, Swedish investment group EQT and the Struengmann family of Germany discuss a joint purchase of the generics company for $21.6 billion. The amount would make it the year’s biggest pharmaceutical deal. In addition, according to the outlet, other private equity investors have expressed interest in joining EQT and the Struengmanns, who provided the investment strength behind BioNTech.
According to Reuters, the Struengmann twins, Thomas and Andreas, have done business with Novartis before, selling a generics firm, Hexal, to the company in 2005. EQT and the Struengmann family have also collaborated on other projects. For example, they paid $2.7 billion for Siemens’ hearing aid division in 2014. So when Novartis, located in Switzerland, announced a plan to give Sandoz more autonomy three years ago, industry analysts expected a daring move.
Novartis was on the verge of selling a portion of its generics business to Aurobindo of India for $1 billion before the deal fell through due to a U.S. Federal Trade Commission antitrust review setback. Then, this month, Novartis hinted at a possible divestment when it announced a strategic evaluation of Sandoz, adding that all options were being considered.