Novartis AG (NVS), a Swiss based company, in its biggest asset sale since 2008 has entered into an agreement to sell blood transfusion diagnostics unit for $1.68 billion to a Spanish based health care company, Grifols SA, reports Bloomberg.

Biggest divestment since 2008

Basel based company is expected to conclude the sale in the early half of next year to Europe’s largest maker of blood plasma products, making the deal its biggest divestment  since selling the stake in  Alcon Inc, in 2008.

The Swiss drug maker acquired the blood unit after its purchases Chiron in 2006.  Chiron is in the business of enhancing the blood transfusion safety through testing for transmittable disease, and clocked sales around $565 million in 2012.

According to Novartis, neither related diagnostics unit, which is a part of Novartis’s pharmaceutical business, nor Genoptix division comes under the agreement.

Grifols is looking forward to earn annual revenue from its diagnostics division to a tune of $1 billion after the purchase helping it to enhance the earnings in the first year. It has arranged for bridge loans of $1.5 billion fully subscribed by Nomura, Banco Bilbao Vizcaya Argentaria SA and Morgan Stanley.

Grifols notes that the purchase will enhance leverage “moderately.”

Strategic review

Novarti’s chief executive, Joseph Jimenez, told that the company in the future will be selling more units to focus on other larger business such as eye care, generic drugs and pharmaceuticals.

Chief Executive Joe Jimenez said in an interview that after the sale of the blood transfusion diagnostics unit Novartis AG will consider all options that will allow the company to realize the full potential.

Any further detail on the company’s strategic review was not presented by Jimenez. He declined to comment on when the future decision will be announced, and said that deal with Grifols is “the first definitive announcement” from the assessment.

Mr. Jimenez announced that the sale was part of the annual evaluation of the company’s business, and is influenced by the changing regulatory and insurance environment that favors businesses with scale.