Sandoz Gains Investment-Grade Rating Post Spin-off, Secures Substantial Financing

Sandoz Gains Investment-Grade Rating Post Spin-off, Secures Substantial Financing

(IN BRIEF) Novartis has confirmed its plans for a full Spin-off of its Sandoz business, with trading of new Sandoz Group AG shares and ADRs scheduled to begin on October 4, 2023. This comes after receiving shareholder approval and key regulatory approvals. Sandoz shares will be listed on the SIX Swiss Exchange, and Sandoz ADRs will be traded on the OTCQX®. Credit rating agencies have affirmed Sandoz’s investment-grade rating, and the company has secured substantial debt financing. The Spin-off will involve Novartis shareholders receiving one Sandoz share or ADR for every five Novartis shares or ADRs they hold, with cash compensation for fractional interests. The Spin-off is expected to have a tax-neutral impact for Swiss and US federal income tax purposes. For more details, interested parties can refer to the Sandoz listing prospectus and related documents.

(PRESS RELEASE) BASEL, 25-Sep-2023 — /EuropaWire/ — Novartis (SWX: NOVN), a Swiss multinational pharmaceutical company, is pleased to confirm its plans for the complete Spin-off of the Sandoz business, with the commencement of trading for new Sandoz Group AG shares and ADRs (American Depositary Receipts) set for October 4, 2023.

This announcement follows the successful Novartis shareholder approval for the Spin-off of Sandoz, which took place at the Extraordinary General Meeting held on September 15, 2023. Additionally, crucial regulatory approvals have been secured, including the endorsement by SIX Exchange Regulation for the listing of Sandoz shares on the SIX Swiss Exchange (subject to technical deliveries only).

Starting from October 4, 2023, Sandoz shares are anticipated to be officially listed and traded on the SIX Swiss Exchange under the symbol “SDZ.” Post-Spin-off, Sandoz will become a part of the Swiss Performance Index (SPI®), Swiss Leader Index (SLI®), and other relevant Swiss indices, in accordance with the announcement made by the SIX Swiss Exchange. Sandoz ADRs are also expected to be traded on the OTCQX®, with the symbol to be made available shortly before the Spin-off date.

Significant credit rating agencies have affirmed that Sandoz will maintain an investment-grade credit rating after the Spin-off, solidifying its position within the industry. Moody’s Investors Service and S&P Global Ratings have assigned Sandoz Baa2 and BBB ratings, respectively.

Sandoz has successfully secured debt financing totaling USD 3.75 billion across various currencies through a consortium of banks. This financing arrangement will be complemented by a revolving credit facility of USD 1.25 billion to serve as an undrawn backstop facility, demonstrating the company’s commitment to financial stability.

The Spin-off will be executed through the distribution of a dividend-in-kind by Novartis, scheduled for October 4, 2023. As part of this process, each Novartis shareholder will receive one Sandoz share for every five Novartis shares they hold, while each Novartis ADR holder will receive one Sandoz ADR for every five Novartis ADRs they possess. Cash compensation will be provided to Novartis shareholders and ADR holders holding fractional interests. Importantly, the Spin-off is expected to have a tax-neutral impact for Swiss tax and US federal income tax purposes.

For detailed information on the listing prospectus of Sandoz and any supplements related to it, please access the following links:

• Click here to view the Listing Prospectus.
• Click here to access the supplements to the Listing Prospectus and other pertinent documents.

Novartis looks forward to a successful Spin-off of Sandoz, marking an important milestone in its commitment to delivering innovative healthcare solutions to patients worldwide.

Additional Transaction Details

Completion of the proposed Spin-off is subject to satisfaction of certain conditions, including 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.

Disclaimer
This media update contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “look forward,” “believe,” “committed,” “investigational,” “pipeline,” “launch,” or similar terms, or by express or implied discussions regarding the potential completion of the announced Spin-off of Sandoz; regarding whether the Spin-off is in the best interests of shareholders, regarding the future commercial performance of Novartis or of a separate Sandoz business, or regarding any potential strategic benefits, synergies or opportunities as a result of the Spin-off; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements are based on our current beliefs and expectations regarding future events and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that the proposed Spin-off will be completed in the expected form or within the expected time frame or at all. Neither can there be any guarantee that Novartis or a separate Sandoz business will be able to realize any of the potential strategic benefits, synergies or opportunities as a result of the Spin-off, within any particular time frame, or at all. Nor can there be any guarantee that shareholders of Novartis or Sandoz will achieve any particular level of shareholder returns. Neither can there be any guarantee that the Spin-off of Sandoz will in fact be in the best interests of shareholders, or that Novartis or a separate Sandoz business, will be commercially successful in the future, or achieve any particular credit rating or financial results. In particular, our expectations regarding such products could be affected by, among other things: an unexpected failure to satisfy the required closing conditions, or unexpected delays in meeting these requirements; the potential that the strategic benefits, synergies or opportunities expected from the proposed Spin-off may not be realized or may take longer to realize than expected; the inherent uncertainties involved in predicting shareholder returns; a failure to successfully separate Sandoz from the Novartis Group subsequent to the completion of the Spin-off, or within the expected time frame; potential adverse reactions to the proposed Spin-off by customers, suppliers, strategic partners or key Sandoz personnel and potential difficulties in maintaining relationships with such persons; the uncertainties inherent in research and development, including clinical trial results and additional analysis of existing clinical data; the ability of Sandoz as a standalone company to obtain or maintain proprietary intellectual property protection; regulatory actions or delays or government regulation generally; global trends toward health care cost containment, including government, payor and general public pricing and reimbursement pressures and requirements for increased pricing transparency; our ability to obtain or maintain proprietary intellectual property protection; the particular prescribing preferences of physicians and patients; general political, economic and business conditions, including the effects of and efforts to mitigate pandemic diseases such as COVID-19; safety, quality, data integrity or manufacturing issues; potential or actual data security and data privacy breaches, or disruptions of our information technology systems, and other risks and factors referred to in Novartis AG’s current Form 20-F on file with the US Securities and Exchange Commission or in the Swiss listing prospectus and any supplements filed by Sandoz with the SIX Swiss Exchange. Novartis is providing the information in this media update as of this date and does not undertake any obligation to update any forward-looking statements contained in this media update as a result of new information, future events or otherwise.

About Novartis
Novartis is reimagining medicine to improve and extend people’s lives. We deliver high-value medicines that alleviate society’s greatest disease burdens through technology leadership in R&D and novel access approaches. In our quest to find new medicines, we consistently rank among the world’s top companies investing in research and development. About 103,000 people of more than 140 nationalities work together to bring Novartis products to nearly 800 million people around the world. Find out more at https://www.novartis.com

About Sandoz
Sandoz, a Novartis division, is a global leader in generic pharmaceuticals and biosimilars. Our purpose is to pioneer access for patients by developing and commercializing novel, affordable approaches that address unmet medical needs. Our vision is to be the world’s leading and most valued generics company. Our broad portfolio of high-quality medicines covers major therapeutic areas.