The two drugmakers said in separate statements that Roche would repurchase 53.3 million of its own shares currently held by Novartis for around 19 billion Swiss francs.

“After more than 20 years as a shareholder of Roche, we concluded that now is the right time to monetise our investment,” said Novartis chief executive Vas Narasimhan.

Novartis has been a shareholder of Roche since May, 2001 and currently holds 33% of its outstanding voting shares.

“Today’s announcement is consistent with our strategic focus and we intend to deploy the proceeds from the transaction in line with our capital allocation priorities to maximise shareholder value,” he said.

Novartis acquired the stake between 2001 and 2003 for US$5 billion “as a long-term financial investment” from which it has since earned more than US$6 billion.

Today, however, “Novartis does not consider the financial investment in Roche as part of its core business and therefore not a strategic asset”, it said.

Roche chief Christoph Franz said he was “convinced that the envisaged transaction is in the best interest of Roche and the holders of Roche equity securities from a strategic and economic perspective”.

As a result, “Roche will be even better positioned strategically in the future to provide life-saving medicines and diagnostics to people around the world”.

Roche said the deal, which is to be financed via debt, must first be approved by shareholders at an extraordinary general meeting on Nov 26.

Once repurchased, the shares will be cancelled.

The transaction will not lead to any changes in control of the drugmaker, Roche insisted, “as the pool formed by shareholders of the founding families has held the majority of the votes represented at general meetings of Roche previously”.

The voting power of the family pool will increase to around 67.5% upon completion of the transaction, Roche said.