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Novartis may have a buyer for $21B generics unit Sandoz

Amid the industrywide push by Big Pharmas to spin off their generics and consumer businesses, Novartis may be on the verge of separating itself from Sandoz.

Swedish-based investment group EQT and the Struengmann family of Germany are considering a joint move to purchase the generics outfit for $21.6 billion, according to German newspaper Handelsblatt.

The price would make it the largest pharma deal of the year. EQT and the Struengmanns, who provided the investment power behind BioNTech, have attracted interest from other private equity investors to join the group, the outlet reported.

The Struengmann twins, Thomas and Andreas, have done business with Novartis in the past, selling a generics maker, Hexal, to the company in 2005, Reuters points out.

EQT and the Struengmann family have hooked up for other deals, as well. In 2014, they purchased the hearing aid unit of Siemens for $2.7 billion.

Three years ago, when Switzerland-based Novartis revealed a plan to grant more autonomy to Sandoz, industry watchers anticipated a bold move, similar to the divestitures made by other pharmaceutical giants designed to allow them to focus on the high-risk, high-reward business of developing drugs.

Merck has created Organon. Pfizer merged its generics maker, Upjohn, with Mylan, creating Viatris. And most recently, Johnson & Johnson revealed it was establishing a new publicly traded company to handle its consumer health business.

Novartis was nearing the sale of a portion of its generics business to Aurobindo of India for $1 billion before the deal fell through thanks to an antitrust review setback with the U.S. Federal Trade Commission.

Then, last month, Novartis signaled interest in a potential divestiture when it launched a strategic review of Sandoz, saying all actions were under consideration. In the first nine months of 2021, Sandoz’s sales in the U.S. declined by 17% while the entire unit’s revenue decreased by 4% year over year.