Novartis is budgeting $6B a year for bolt-ons

Novartis ($NVS) CEO Joe Jimenez says the pharma giant easily has enough cash on hand to keep the dividends flowing to investors while reserving up to $6 billion for new bolt-on buyouts. In an interview with the Swiss newspaper Schweiz am Sonntag, which was picked up by Reuters, Jimenez says that the sweet spot for deals lies in the $2 billion to $4 billion arena--modest for a company of that size. Most of the Big Pharma companies like Roche ($RHHBY) and AstraZeneca ($AZN) will probably top out around $10 billion on buyout deals, analysts note, putting them in the same ballpark as Amgen ($AMGN) when it acquired Onyx ($ONXX) in one of the biggest biotech deals of the year. Of course, these numbers have a habit of shifting. Novartis Chairman Joerg Reinhardt told reporters earlier this year that a $10 billion buyout was "not out of reach." The big $20 billion-plus pacts seem in distinct disfavor these days, with the major M&A tie-ups between pharma rivals looking like a relic of a bygone era. Report

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