Novartis faces insider trading probe
AGENCE FRANCE PRESSE

ZURICH, DEC 3: Swiss stock market authorities have begun an investigation into possible insider dealing in shares in the Swiss company Novartis and Anglo-Swedish group Astrazeneca, the spokesman for Swiss stock market said today. The two groups announced yesterday that they were merging their agro-chemical businesses to form Syngenta which would be the biggest agro-chemical group in the world.

The surveillance unit of the stock market began from about mid-day yesterday to look at trading in Novartis stocks and options in recent weeks to establish if had been insider trading.

Hug said if suspicions were confirmed, an inquiry would be opened. Some 260,000 stocks were exchanged on a daily basis in the last few days, compared to about 100,000 around three weeks ago. The inquiry is due to last several months and cover a period going back to last spring when Novartis chairman and CEO Daniel Vasella first spoke of the possibility of a merger, market spokemsan said.

Shares of both AstraZeneca and Novartis rose Wednesday. AstraZeneca's ADRs, which trade on the New York Stock Exchange, closed up 75 cents to $45.25 at 4 p.m. Shares of Novartis, which trade on the Zurich Stock Exchange, closed at 2,500 Swiss francs ($1,574), up 21 Swiss francs.

Some analysts predicted the agrochemical deal would buoy investor sentiment ahead of a research update by AstraZeneca's pharmaceutical division in London. The new company, which will be spun off and combined into a new, separately traded concern, would be the biggest agrochemical business in the world, with sales of $8 billion and a potential stock-market value of $15 to $20 billion, these people say.

The Novartis-AstraZeneca move is likely to trigger further consolidation within the $30 billion-a-year agrochemical industry. Drug-company executives, who at one time thought there would be great synergies in combining pharma and agricultural research activities.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.