Novartis shareholders approve proposed 100 percent Spinoff of Sandoz

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.

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 October 4, 2023," the company stated in a release.

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 (ADRs) to Novartis ADR holders.

Novartis shareholders and Novartis ADR holders will receive:

• 1 Sandoz Share for every 5 Novartis Shares
• 1 Sandoz ADR for every 5 Novartis ADRs

The Spin-off is expected to be tax neutral for Swiss tax and US federal income tax purposes.

“We welcome the 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 (ADR) program in the US. The ADRs will not be listed on a US national securities exchange. In addition to Novartis shareholder approval, completion of the proposed Sandoz Spin-off is subject to satisfaction of certain conditions, including receipt of the necessary approvals for the listing of the Sandoz shares, no event outside of the control of Novartis preventing the Spin-off and no material adverse change. There can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be completed," the release further stated.