By Dhirendra Tripathi
Investing.com – Novartis ADRs (NYSE:NVS) traded 3.8% higher in Thursday’s premarket after the company said it will buy back shares worth up to $15 billion.
The money for the repurchase will come from the $20.7 billion the Swiss drugmaker got from selling part of its stake in rival Roche (SIX:ROG).
The buyback, to begin in coming days, will be completed by end-2023, Novartis said.
Novartis owned 33%, or 53.3 million, of Roche’s voting shares and used record-high share prices to exit the company it bought into between 2001 and 2003.
The shares were acquired as part of a takeover attempt under then-Novartis Chief Executive Officer Daniel Vasella. The effort failed but gave Novartis a capital gain of $14 billion on the original investment.
Roche will cancel the shares it buys back from Novartis.
Novartis said the buyback program will still leave it with enough cash to fund a rising dividend, as well as investment in the company's business and bolt-on acquisitions. It reiterated its forecast of growing sales by 4% or more through 2026.