GlaxoSmithKline will pay $13 billion to Novartis for its 36.5% stake.

GlaxoSmithKline(GSK) has acquired all of Novartis’ shares in the consumer healthcare joint venture that the two companies formed in 2014. At the time, the over-the-counter business of Novartis was combined with GSK’s consumer healthcare business. In 2017, the company reported sales of £7.8 billion.

GSK will pay Novartis $13 billion for its 36.5% stake in the joint venture in order to “capture full value of future performance,” according to the company. “The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading consumer healthcare businesses. For the group, the transaction is expected to benefit adjusted earnings and cash flows, helping us accelerate efforts to improve performance. Most importantly it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals R&D,” said GSK CEO Emma Walmsley.

Novartis, meanwhile, is exiting consumer healthcare in order to focus on its core businesses, most notably its branded, prescription drugs. “While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price. This will strengthen our ability to allocate capital to grow our core businesses, drive shareholder returns, and execute value creating bolt-on acquisitions as we continue to build the leading medicines company, powered by digital and data,” comments Vas Narasimhan, CEO of Novartis.

The deal, which is subject to approval by GSK shareholders, is expected to close in quarter two of 2018.