* New chairman reviewing Novartis' five business divisions
* Board member says Syngenta could be a model for spin-offs
* Novartis may consider sale of animal health unit -analyst
By Caroline Copley
ZURICH, Sept 23 Novartis may take a leaf out of its past deal-book as the Swiss drugmaker conducts a review into some of its underperforming businesses, a board member said.
New chairman Joerg Reinhardt has launched a review of the drugmaker's portfolio fanning speculation that some of the company's smaller units could be sold, spun-off or integrated into other divisions.
Novartis board member Pierre Landolt cited agrochemicals company Syngenta - formed in 2000 through the merger of Novartis' Agribusiness and Zeneca Agrochemicals - as a guide for how the drugmaker could unlock value for shareholders.
"There are markets in which we have to grow. Syngenta could be a model there," Landolt, who is also chairman of the Sandoz Family Foundation that owns 3.3 percent of Novartis's share capital, said in an interview for the Basler Zeitung newspaper.
"Back then we succeeded in creating a new type of integrated agro-group through a combination of spin-off and fusion. Perhaps there are other activities in the company which could be developed in this way," he said in the paper's weekend edition.
Syngenta is now the world's No. 1 maker of crop chemicals with a market value of $38 billion.
Reinhardt, who took over as chairman on Aug. 1, has defended Novartis' diversification strategy, but stressed the company would only hang on to companies that are among world leaders. He has also said a $10 billion buy would not be out of reach.
Citi analyst Andrew Baum said that Novartis' animal health business - which is No. 7 in the $22 billion market according to Brakke Consulting - may be a candidate for sale.
"Our belief is that Novartis will consider the potential sale of the circa $1.5 billion per annum animal health business given its sub-scale size and the paucity of external assets," Baum said in a research note published on Sept. 22.
He said Novartis was more likely to hang onto its over-the-counter business, which along with animal health makes up the other half of the firm's Consumer Health division, and grow it through acquisitions.
Global drugmakers have stepped up the pace of restructurings, as investors clamour for management to unlock value trapped inside large firms.
If Novartis were to consider spinning off its animal health unit, it would be following in the footsteps of Pfizer that spun out its operations in this area into a new company called Zoetis last February. (Editing by Louise Ireland)