Novartis successfully completes friendly public offer for Lek, with more than 99% of shares tendered

21. 11. 2002

Deal positions Novartis Generics as a leader in the extended European market including the Eastern and South Eastern Europe and CIS region.

Basel, 21 November 2002 – Novartis announced today that its friendly public offer for Lek, which closed at noon on Monday, has been declared “successful” by the Slovenian Market Agency, with 99.07% of all Lek’s shares having been tendered in what is considered to be the largest Generics acquisition to date. The total purchase price amounts to EUR 876 million (CHF 1.3 billion). Of the 18 151 shareholders who tendered, 83% (representing 71% of the total share capital) chose payment for their shares in Slovenian Tolars (SIT), the remainder in Euros. The Slovenian competition authorities have already given the green light for the acquisition.

Christian Seiwald, Head of Novartis Generics worldwide commented: “We are delighted with the excellent response to the offer and will now concentrate on combining and growing our business, and bringing state-of-the-art therapies and cost-effective healthcare solutions to patients. With Lek’s attractive portfolio and strong franchise in Central Eastern and South Eastern Europe and in the CIS, we have increased our segment share and significantly expanded our leading global presence.”

As previously announced, the strategic rationale for the acquisition builds on accelerating growth and improved access to new markets. Novartis has indicated its intention to support Lek’s investment plans to increase capacity, principally in Slovenia and across the region. Lek will have a key role in Novartis generics’ strategy in the CEE, SEE and CIS markets, and provides an important additional research, development and manufacturing center for Novartis Generics.

Lek will maintain its identity. Its management team, with Metod Dragonja as Chief Executive Officer, will play a leading role in the future of the regional business and will participate in Novartis Generics’ Global and Executive Committees.

Excellent fit

The two companies are highly complementary in terms of market presence. Lek offers an excellent platform to penetrate the growing emerging European markets and make a wider range of its products available to doctors and patients. At the same time, Novartis offers Lek market know-how and facilitates access to the US, EU and other markets, leveraging Lek’s pipeline. The combined businesses have a broad product pipeline covering various therapeutic areas such as anti-infectives, cardiovascular and gastrointestinal tract products, and complementary strengths in the production of active ingredients.

About Lek

Based in Ljubljana, Slovenia, Lek is an international group of generics companies and ranks among the leading pharmaceutical businesses in the CEE, SEE and CIS region, while having a broader international presence in several specific product lines. Lek manages a wide-ranging business portfolio, with substantial expertise in anti-infectives, cardiovascular and gastrointestinal tract products. The Lek Group employs about 3600 people in various regions and achieved total sales of SIT 78.5 billion (CHF 544 million), operating income of SIT 9.6 billion (CHF 67 million) and net income of SIT 8.2 billion (CHF 57 million) in 2001. For further information please consult

About Novartis

Novartis’ Generics Business Unit comprises a number of companies that produce high-quality generics and active ingredients for the pharmaceutical and biotechnology industry. Because of its expertise in production and formulation, Novartis Generics can offer a broad range of high-quality pharmaceuticals at competitive prices. The Business Unit employs more than 7000 people worldwide and achieved sales of CHF 2.6 billion in 2001.

Novartis AG (NYSE: NVS) is a world leader in healthcare with core businesses in pharmaceuticals, consumer health, generics, eye-care, and animal health. In 2001, the Group’s businesses achieved sales of CHF 32.0 billion and a net income of CHF 7.0 billion. The Group invested approximately CHF 4.2 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 74 000 people and operate in over 140 countries around the world. For further information please consult