Novartis, the Swiss pharmaceuticals group, is selling its diagnostics business to Spanish health care company Grifols S.A. for $1.7 billion in an all-cash deal.
The disposal comes shortly after Novartis’s chief executive, Joseph Jimenez, said the company was considering selling some units as it worked to focus on its larger businesses, which include pharmaceuticals, eye care and generic drugs.
Analysts had called for the sale of Novartis’ diagnostics unit, along with its over-the-counter business. But the deal, announced Monday morning in Europe, is the first such move Novartis has made to execute on Mr. Jimenez’s strategy.
Grifols’s main business is gathering blood and making medicine from blood plasma. But it has a smaller testing unit that already partners with the Novartis diagnostics business it is now buying.
Details of the financial performance of the Novartis division, which tests blood for diseases including H.I.V., were not clear. Yet Grifols believed the deal, which was being financed by Nomura, would allow it to scale its own diagnostics business.
In addition to its partnership with Grifols, the Novartis diagnostics division also works with Johnson & Johnson and with Hologic. Both Johnson & Johnson and Hologic approved the sale to Grifols. The deal was in the works for more than nine months and was negotiated on an exclusive basis.
The last big deal for Grifols came in 2010, when it bought Talecris Biotherapeutics Holdings for $4 billion including debt. Talecris was part owned by Cerberus Capital Management, and represented one of the first wins for the private equity firm after the financial crisis.
Grifols was founded more than 70 years ago by a family of Spanish doctors.
Today the Grifols family still controls the company, and Victor Grifols Roura is chairman and chief executive. The company has a market capitalization of $3.9 billion. Its shares are traded on the Nasdaq and closed on Friday at $29.96.
Announcing third quarter earnings last week, Grifols noted that the United States is a growing market for the company, with sales up 14 percent in the quarter, part of 432 million euros in sales in North America during that time.
