In Short:
Novartis India has clarified that it is not involved in any talks between its Swiss parent company and Alkem Labs regarding an acquisition. The company’s stock rose over 7% following the news. Novartis AG is reviewing its stake in Novartis India, but the Indian entity is unaware of any ongoing negotiations. The parent company’s 70.68% shareholding is under review.
Novartis India Clears the Air on Alkem Labs Negotiations
Novartis India (NIL), a prominent player in the pharmaceutical industry, has stepped forward to clarify its stance regarding recent rumors surrounding potential negotiations with Alkem Labs. In a clear message, the company stated that it is neither a participant in nor involved in any discussions between its Swiss parent, Novartis AG, and the Mumbai-based drug manufacturer.
Market Reactions and Company Stock Performance
Despite the swirling rumors, NIL’s stock experienced a significant boost, rising by over 7 percent to close at ₹1164.25 on the Bombay Stock Exchange on Thursday. Investors seem to remain optimistic, buoyed by the company’s ongoing operations and market strategies.
An Official Communication
In its formal communication dated February 17, 2024, Novartis India informed the BSE about its receipt of a notice from Novartis AG regarding a strategic review of its investment in the Indian entity. The Board of Directors has expressed its willingness to support any necessary actions that Novartis AG may require.
Going further, Novartis India reiterated, “We are unaware of any discussions or negotiations that Novartis AG’s Investment Banker may be having with Alkem Labs or any other party.” This has added another layer of clarity for investors and stakeholders alike.
Background on Potential Transactions
Earlier in the day, reports emerged suggesting that non-binding bids had been submitted for a transaction that could be valued at approximately ₹2,000 crore. Such revelations had sparked interest and speculation within the financial community.
Novartis’ Strategic Shift
Back in February, Novartis indicated that it was deliberating on its stake in NIL, particularly its substantial 70.68 percent shareholding. The company clarified that its wholly-owned subsidiary, Novartis Healthcare Private Ltd (NHPL), is not part of this review, maintaining its position within the market.
Interestingly, Novartis’ Global CEO mentioned in a business channel interview that a potential sale could be on the horizon, further fueling discussions around the company’s future directions.
