Novartis, the company behind Fasinex and Clik, wants its businesses to be among industry leaders or it will consider divesting them, chief executive Joe Jimenez has said.

Speculation on possible buyers for the animal health division is high and reports suggest that it may choose to exchange the division with MSD rather than sell it.

MSD recently merged with Schering Plough to become the second largest pharmaceutical company in the world. A swap would make some sense as Novartis has little use for additional cash, with $5.6bn in cash and equivalents and $14bn in operating cashflow.

The current annual dividend is $2.06 per share giving a dividend yield of approximately 3%.

Other possible buyers include Bayer AG, the German chemical giant, US firm Eli Lilly, and Zoetis (a spin off from Pfizer).

Interest is high in the animal health sector due to expected growth in livestock farming in emerging markets as the appetite for meat rises with average household incomes.

The move to sell the animal health division is likely to be more strategic than one of necessity due to the cash situation.

Novartis has debated for some time the future of the animal health business and recent management changes seem ready to make the cut.

Chairman Joerg Reinhardt wishes to revamp the drug maker and said earlier this year that the group was reviewing its portfolio of businesses.

Jimenez echoed this, saying they are considering options for non-core assets that lack scale to become world leaders.

Citi analyst Andrew Baum estimates that the animal health unit had annual sales of approximately $1.3bn.

Novartis does not separate the division in its financial accounts. The group had revenues of $56bn last year making the animal health division a small non-core part.

In 1996, Ciba-Geigy merged with Sandoz. The pharma and agrochemical divisions of both companies combined to form Novartis.

Novartis then divested its agrochemical and GM crops business in 2000, forming Syngenta.