At a recent Extraordinary General Meeting, Novartis shareholders approved the proposed 100% spin-off of Sandoz, the generics and biosimilars business of Novartis.
Shareholders also approved an ordinary capital decrease of the share capital of Novartis AG in the amount of the share capital of Sandoz. This is to achieve tax neutrality of the spin-off for Swiss withholding tax purposes and for income tax purposes for Swiss domiciled shareholders holding the shares as private assets, the company noted.
This decision follows the announcement in August 2022 that Novartis intended to separate the Sandoz business to create an independent company by way of a 100% spin-off. Novartis is confident that the spin-off is in the best interests of shareholders, creating a European champion and a global leader in generics and biosimilars, and a more focused Novartis. The spin-off is planned to occur on or around Oct. 4, 2023.
The spin-off will be implemented through the distribution of a dividend-in-kind of Sandoz shares to Novartis shareholders, and of Sandoz American Depositary Receipts to Novartis ADR holders.
“We welcome today’s decision by our shareholders to approve the spin-off of our Generics and Biosimilars business, Sandoz, to create an independent company listed on the SIX Swiss Exchange”, said Joerg Reinhardt, chair of the board of directors of Novartis. “With this step, both Sandoz and Novartis will be able to optimize management focus, allocate capital on business priorities, and be in a better position to create sustainable shareholder value in the future.”
Sandoz is planned to be listed on the SIX Swiss Exchange, with an American Depositary Receipt program in the United States. The ADRs will not be listed on a U.S. national securities exchange.