03.01.02
Novartis To Sell Functional Foods Business In Europe; Forms Agreement With Forbes
Medi-Tech
In order to sharpen its focus on healthcare, Novartis AG, Zurich, Switzerland, has put certain health and nutrition brands such as Ovaltine and Isostar up for sale. These non-core businesses had 2001 sales of approximately $495 million and potential buyers, which include Nestle SA and Danone, could pay up to three times that. “Our health and functional food brands are strong and well established and we believe their growth can be accelerated at companies where there is a good strategic fit,” said Daniel Vasella, CEO and chairman. In other news, Mr. Vasella has been named to the board of directors for PepsiCo, Purchase, NY, which owns Quaker Oats, Novartis’ partner in the Altus functional foods venture in the U.S.
Speaking of the U.S., Novartis Consumer Health, Summit, NJ, has reached an agreement with Forbes Medi-Tech, Vancouver, British Columbia, Canada, for the latter to acquire the licensing and distribution rights to consumer products fortified with Reducol™, Forbes’ proprietary cholesterol-lowering functional food ingredient. In addition to the $4 million deal, Forbes also has the option to acquire potential sublicenses currently being negotiated by Novartis, although Novartis retains an exclusive option for the worldwide royalty-bearing license to use Reducol in medical foods and to incorporate Reducol into certain fruit beverages, ready-to-eat cereals and grain-based cereal bars manufactured by Altus.