The loud welcome given by investors to this week's deal for Novartis AG and GlaxoSmithKline to trade more than $20 billion of assets could trigger more pacts in the pharmaceuticals sector and beyond.
Such swapping of assets is rare in any sector, yet it can make a lot of sense where companies are committed to playing to their strengths by building up certain businesses and divesting others, while avoiding the pitfalls of large-scale mergers.
With the Novartis-GSK template now available for all to examine, bankers and industry experts said that a milestone had been passed.
Chris Stirling, global head of KPMG's life sciences practice, expects more asset swaps to be discussed in boardrooms of drugmakers and large corporations with portfolios ripe for restructuring, such as consumer goods groups.
"Where you've got large global businesses operating in lots of different areas, then I think this is something chief executives will now look at seriously, given that this deal provides them with a great example," he said.
Novartis will buy cancer drugs from GSK while its British rival takes most of the Swiss group's vaccines, with the two companies also creating an $11 billion-a-year non-prescription consumer healthcare business.
The complicated nature of the deal means it was tricky to pull off and could easily have been derailed. That risk of failure, illustrated by the collapse of earlier talks between Novartis and Merck, has been a deterrent in the past to companies weighing such involved transactions.
The potential benefits, however, are clear. Swapping assets saves companies from having to access capital markets or selling to private equity firms at cut-throat prices, says Richard Stroud, head of the consumer goods and services practice at GLG Research.
"They're speaking corporate to corporate, partner to partner. They're both in the same boat, so no one's trying to outdo each other," Stroud said. "In consumer goods, there are some areas where it would work incredibly well."
He suggested one potential deal, whereby the family that owns Germany's Beiersdorf and the Tchibo coffee business would swap Tchibo with Joh. A Benckiser's (JAB) Coty. Such a deal would unite Coty cosmetics brands such as Rimmel with Beiersdorf's Nivea, La Prairie and others, as well as JAB's three coffee businesses with Tchibo.
One of the biggest hurdles to asset swaps is that they require competitors to put aside traditional rivalries.
"You need the leaders of both companies to be grown-up enough to give up a good asset and trade that