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Home Industry News Novartis Plans 10% Share Repurchase & Makes Sandoz a Spin Off

Novartis Plans 10% Share Repurchase & Makes Sandoz a Spin Off

14th March 2023

During the upcoming three years, Novartis plans to buy back as much as $11 billion worth of company stock, equivalent to 10% of their registered shares, as part of a strategic repurchase initiative.

As part of an active mandate, Novartis is still allowed to purchase shares to the value of 6.5 billion Swiss francs.

The $20.7 billion influx of cash from pulling its investment in competitor Roche was used to support a $15 billion share repurchase initiative in the latter half of 2021.

Businesses generally start share repurchase programmes to increase share prices and provide additional value to existing shareholders. Yet, while there have been fluctuations over time, the price of shares in Novartis has mainly stayed consistent since late in 2021.

Due to the significant dip in total long-term cash or share payment, the company’s Chief Executive Officer Vas Narasimhan’s income was deeply impacted. As a result, Narasimhan’s overall remuneration dropped by 25% from 2021 to 2022.

Novartis is implementing a notable change extending throughout the business. This includes a significant reorganisation that may reduce expenses by as much as $1.5 billion each year by 2024. Moreover, Sandoz, the company’s generic and biosimilars division, is in the midst of being made independent.

At the same time, the company has been raising its dividend. They have been creeping this up over a prolonged period, with this move being the 26th time it has been increased, going up by approximately 3%.

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