March 27 (UPI) -- Novartis agreed to sell GlaxoSmithKline its stake in a joint healthcare venture for $13 billion, the companies said Tuesday.
GSK will buyout 36.5 percent of Novartis's stake in the joint venture, which sells products like Nicotinell nicotine patches, Panadol headache tablets and Sensodyne toothpaste.
"The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world's leading Consumer Healthcare businesses," GSK CEO Emma Walmsley said in a statement.
"The transaction is expected to benefit adjusted earnings and cash flows, helping us accelerate efforts to improve performance. Most importantly it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals [research]."
For Novartis, the deal will allow the company to focus on the development of its core pharmaceuticals business.
"While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price," Novartis CEO Vas Narasimhan said.
GSK shareholders must approve the buyout and four Novartis board appointees must step down once it completes.
To help support fund the transaction, GSK said it's initiating a strategic review of Horlicks, a malted milk drink popular in India. The outcome of the review will be concluded at the end of 2018, the company said.