Novartis creates new division as a result of Chiron acquisition

Following the approval by shareholders of Novartis" offer to buy the outstanding stock of Chiron Corporation, the Swiss-based multinational has created a new vaccines and diagnostics division. The new division, called Novartis Vaccines & Diagnostics, consists of two businesses: Novartis Vaccines, and a diagnostics business that retains the Chiron name.

In the agreed deal, Novartis is to acquire all outstanding shares of the California-headquartered business for US$48 per share. The all-cash deal represents a total value of US$5.4 bn. Annual cost-savings through synergies totalling US$200m are anticipated within the next three years, with 50% expected to be achieved in the first 18 months.

"With this transaction, Novartis will gain access to attractive strategic growth platforms in the dynamic vaccines market and the rapidly expanding diagnos-tics business. At the same time, Chiron will add to our pharmaceuticals pipeline, especially in our oncology franchise," said Dr Daniel Vasella, chairman and ceo of Novartis.

While the Chiron blood-testing business is already strong in the US, Novartis says it plans to strengthen its position globally by investing in r&d, and to explore opportunities to expand in molecular diagnostics.

Chiron's BioPharmaceutical business, whose products include treatments for cystic fibrosis, renal/skin cancer and skin infections, will be integrated into Novartis Pharmaceuticals. Chiron's early-stage research will be incorporated into the Novartis Institutes for BioMedical Research (NIBR), which will maintain Chiron's existing research centre in Emeryville, California.