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Slaughters, Freshfields and Linklaters lead on Glaxo/Novartis multibillion-dollar joint venture

Magic Circle trio Slaughter and MayFreshfields Bruckhaus Deringer and Linklaters have landed lead advisory roles on a multi-billion-dollar joint venture and asset swap between pharmaceutical giants GlaxoSmithKline (GSK) and Novartis.

The three-prong deal – announced in the same week as Novartis’ Freshfields-led $5.4bn sale of its animal health division to Eli Lilly – will see GSK and Novartis combine their respective consumer healthcare businesses, giving GSK a majority stake of 63.5%.

A further asset swap will see GSK acquire Novartis’ global vaccines business (excluding flu vaccines) for an initial cash consideration of $5.25bn with potential ‘milestone payments’ of up to $1.8bn alongside ongoing royalties, as Novartis acquires GSK’s cancer drugs business for $16bn.

Freshfields’ London-based corporate partner Julian Long led a team for Novartis. Rod Carlton, head of the firm’s London antitrust, competition and trade group; Thomas Janssens, managing partner of the firm’s Brussels’ office; and US antitrust partner Paul Yde also worked on the deal.

Linklaters also advised Novartis on the deal, fielding a multi-jurisdictional team led by corporate partner James Inglis and including Aisling Zarraga (corporate partner); Peter Cohen-Millstein (US corporate counsel); Sir Christopher Bellamy QC (anti-trust partner), Jeff Schmidt (US anti-trust partner), Nigel Jones (IP partner), Marly Didizian (TMT Partner), and Dominic Winter (tax partner).

The Slaughter and May team advising GSK was led by corporate and commercial partners Simon Nicholls, Gavin Brown, Richard Smith and David Johnson, who worked alongside GSK’s internal legal team including Dan Troy, Chip Cale, Antoon Loomans, James Ford, Paul Noll and Edward Gimmi.

Meanwhile, a US team from Cleary Gottlieb Steen & Hamilton is also advising GSK, with anti-trust partner George Cary leading alongside Cologne-based competition partners Romina Polley and Patrick Bock. Swiss firm Niederer Kraft & Frey is advising on Swiss law.

GSK’s CEO Sir Andrew Witty GSK said: ‘This proposed three-part transaction accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings.

‘Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.’

The transaction is expected to complete during the first half of 2015 subject to approvals.

In a separate deal, Novartis announced today (22 April) that it has agreed to sell its animal health division to Eli Lilly and Company for nearly $5.4bn. Weil Gotshal & Manges advised longstanding client Lilly while Freshfields once again led for Novartis.