Novartis shareholders on Wednesday approved plans to spin off the Swiss health care group's agribusiness and to merge it with that of British group, AstraZeneca, to create the world's largest crop protection company.
The shareholders, at an extraordinary general meeting in St Jakobs Hall in Basel, voted overwhelmingly in favour of the plan. AstraZeneca shareholders have still to approve the deal.
Both parent companies are eager to divest themselves of their agribusinesses, which have suffered of late amid a global downturn in farming.
The new company, called Syngenta, last month unveiled a plan to buy back up to 10 per cent of its shares after it makes its bourse debut on November 13.
Syngenta officials have given no earnings forecast, but have said they expect demographic trends and continued global economic growth to fuel demand for their products.
Pending final US regulatory approval, Syngenta will be the biggest provider of crop protection products such as herbicides, fungicides and insecticides, and number three in commercial seeds for a range of crops, vegetables and flowers.
On Wednesday, Novartis revealed that sales were up 13 per cent for the first nine months of the year at SFr27.6 billion, which was in line with market expectations. However, sales only rose by five per cent in local currencies.
Excluding businesses divested in 1999 and the discontinuing Agribusiness activities to be spun off in mid-November, the company's healthcare division posted nine month sales of SFr21.3 billion, an increase of 15 per cent in Swiss francs or seven per cent in local currencies.
That marked a minor slowdown from the eight per cent rise in local currencies, which drug sales generated in the first six months of the year.
Novartis reiterated that it expects solid growth in operating income and a higher net profit in 2000. The healthcare group has also upped its sales forecast for the flagship drugs business.
"The group expects the overall sales performance in local currencies to continue, with pharmaceutical sales growth in the mid- to high single-digit range for the full year," Novartis said in its interim sales statement.
In the past Novartis had spoken of simply mid single-digit drug sales growth.
The group said it would spend an extra SFr1 billion on marketing and sales over the next year amid new drug launches, which it said could lead to a short-term decline in operating margins.
swissinfo with agencies