Novartis and GlaxoSmithKline, two of the world’s leading drugmakers, have agreed to exchange assets and combine their consumer healthcare units.
Novartis will acquire GSK’s cancer drugs business for $16bn (£9.5bn) and sell its vaccines division, excluding the flu unit, to GSK for $7.1bn.
In a separate deal, Novartis has agreed to sell its animal health division to Lilly for nearly $5.4bn.
Novartis said the moves would help the firm focus on its key businesses.
“The transactions mark a transformational moment for Novartis,” Joseph Jimenez, chief executive of Novartis, said in a statement.
“They also improve our financial strength, and are expected to add to our growth rates and margins immediately.”
The deals are a part of Novartis’s review of its business as it continues to face sluggish growth.
Novartis and GSK said that combining their over-the-counter (OTC) units would help boost the fortunes of both the companies.
The combined unit will have annual revenues of £6.5bn.
“Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce,” Andrew Witty, chief executive, of GSK, said in a statement.
“With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.”
GSK said the agreement with Novartis “significantly exceeds GSK’s returns criteria” and the transaction “would increase overall GSK revenues by £1.3bn to £26.9bn”.
Glaxo shareholders will get a £4bn capital return from the deal proceeds, the firm said.