Bristol-Myers Sells North America OTC Business

Novartis will pay $660 million in cash for the operation.
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Novartis

(NVS) - Get Report

said Thursday it will buy

Bristol-Myers Squibb's

(BMY) - Get Report

over-the-counter drug business in North America, including the pain relievers Excedrin and Bufferin.

Novartis will pay $660 million in cash for the business that Bristol-Myers Squibb put up for sale in January. These drugs produced $258 million in sales last year, 90% of which came from the U.S. Excedrin had $160 million in U.S. sales last year.

The transaction, which requires regulatory approval, should close by the end of September, Bristol-Myers Squibb said.

Additionally, Novartis acquired the rights to produce and market the North American over-the-counter brands that also are sold in Latin America, Europe, the Middle East and Africa.

Bristol-Myers Squibb will keep its OTC operations in Japan, China, Latin America, Europe, the Middle East and Africa.

"These businesses operate separately from the U.S. and Canadian businesses, are unique to their respective geographies and remain an important part of the company's international pharmaceutical business," Bristol-Myers Squibb said. Manufacturing plants are excluded from the Novartis deal.

"The acquisition of these brands, particularly Excedrin, will provide us with greater critical mass in the OTC market in the U.S., as well as with key trade customers," said Paul Choffat, head of Novartis' consumer health division. "In addition, this acquisition will allow us to become a more attractive partner for switching prescription medicines to OTC use."

Although Novartis is best known for prescription drugs, it's also one of the world's largest OTC companies. Nonprescription drugs accounted for $2 billion in sales last year. The Novartis OTC business employs 4,050 people worldwide and is based in Parsippany, N.J.