Europe's third-largest drugmaker Novartis AG will sell its nutritional foods unit, which makes products such as Ovaltine chocolate and Isostar drinks, to focus on developing new medicines, reports Bloomberg.
The Swiss company did not say how much it was asking for the business, which had 850 million Swiss francs (€ 575 million) in sales last year, according to a faxed statement. Novartis had revenue of 35.8 billion francs in 2000.
Three years ago, the company based in Basel, Switzerland was expanding but now it needs to win back investor confidence after its shares fell 16 percent last year because the company failed to win approval for two of its medicines.
Nestle, the world's biggest food maker, declined to comment on whether it was interested in the Novartis unit. Nestle Chief Executive Peter Brabeck has said nutritional products remain a key area for future growth.
In October, Novartis Chief Executive Daniel Vasella told analysts he wasn't satisfied with the way the company's functional foods business had performed.
``Pharmaceuticals remain our focus and our core business,'' Vasella said at a research and development presentation in New York. ``It's always a question of opportunity. Mid-year results were not in line with my expectations. That is my cautionary note.''
Credit Suisse First Boston is advising Novartis on the divestment.