A&O, Osborne Clarke and Proskauer Rose advise on $1.7bn Novartis deal

Allen & Overy (A&O), Osborne Clarke (OC) and Proskauer Rose have taken mandates advising on the $1.7bn (£1bn) sale of Swiss pharmaceutical giant Novartis’ transfusion diagnostics unit to Spanish plasma therapies company Grifols.

Barcelona-headquartered Grifols will acquire the transfusion diagnostics unit of Novartis for US$1,675bn (£1,04bn). The assets include medical products and technology, as well as a manufacturing plant and commercial offices in US, and offices in Switzerland and Hong Kong.

A&O acted for Novartis alongside the company’s in-house team led by general counsel Felix Ehart, with support from in-house lawyers Jonathan Emery and Nicola Smith.

The New York-based A&O team was led by Eric Shube, with anti-trust partner Elaine Johnston, intellectual property partner Paul Keller, environmental law partner Kenneth Rivlin, employment senior counsel Brian Jebb and associates Michael Maier and Danielle Brody in New York and Peter Banks in London.

Osborne Clarke advised Grifols led by transaction partners Tomás Dagá and Raimon Grifols, supported by financing partner David Miranda, anti-trust partner Silvia Steiner and capital markets partner Nuria Martin. They were assisted on the due diligence side of the transaction by associates Oscar Calsamiglia ,Yana Sarkisova  and Laura de la Cruz.

Proskauer Rose worked closely with OC on the US side of the transaction for Grifols, led by corporate partners Peter Samuels, M&A partner Daniel Gatinsky and IP partner Daryn Grossman supported by mergers and acquisitions associates Mina Farbood and Yoon Suk Choo and life sciences associate Jessica Weitzman.

The deal is still subject to regulatory approval but is expected to complete during the first half of 2014.

Background to the deal:

The deal arose out of a strategic review of Novartis’ business portfolio, which was kicked off by new chairman Joerg Reinhardt, after he joined the company in August. The company has elected to rationalise its portfolio of products and services, focusing on three core business areas of pharmaceuticals, eye care and generics.

The company is seeking to divest itself of its smaller businesses, which are over-the-counter medicines, animal health, and vaccines and diagnostics, the latter being the department to which this initial deal belongs.

A&O have a longstanding relationship with Novartis. Former A&O partner Thomas Werlen left private practice to go in-house at Novartis in 2005 (5 October 2009) leading to closer links between the two organisations.

Novartis head of M&A Marvelle Sullivan was also at A&O before going in-house as a lawyer and then moving into her current role.

The firm is on Novartis’ panel for about seven years, over which time its remit has extended from transaction to litigation and intellectual property as well as other advice.

Between 2008 and 2011 A&O advised Novartis on a two-stage transaction, worth $39bn (£19.5bn), involving the purchase of the remaining 75 per cent of Alcon, the world’s largest eye-care company, including a majority stake held by Nestlé (8 April 2008).

Barcelona-based OC partners Tomás Dagá and Raimon Grifols have acted for Grifols for 30 years. OC has worked closely with Proskauer Rose for US-based advice the client since Grifols’ first US acquisition of Alpha Therapeutics in 2003. Both firms also advised Grifols’ on its US$3.4m acquisition of Talecris in 2011.