Novartis, a Swiss multinational pharmaceutical company, has signed a definitive agreement to divest its blood transfusion diagnostics unit to Spanish company Grifols for $1.675bn.

The blood transfusion diagnostics unit became part of Novartis’ operations in 2006 when it acquired Chiron in 2006 and has formed part of Novartis Vaccines and Diagnostics.

It is a large business, headquartered in Emeryville, California has generated $565m in net sales in 2012. But Novartis said selling it is a better option, allowing the company to grow more strategically down the line.

Novartis’ diagnostic business is expected to complement and extend Grifols’ existing product range.

Novartis CEO Joseph Jimenez said the sale of the company’s blood transfusion diagnostics unit enables us to focus more sharply on its strategic businesses while providing Grifols with a platform for global expansion.

"I am especially pleased that the agreement with Grifols provides our associates with an opportunity to join a company that will focus on growing this business aggressively," Jimenez added.

Not included in the sale is the Novartis companion diagnostics unit that is integrated into the pharmaceuticals business, nor the Genoptix business, as these are closely linked to the pharmaceuticals pipeline.

The transaction requires customary regulatory approvals and is expected to be completed in the first half of 2014.

Headquartered in Barcelona, Spain, Grifols is reportedly the world’s third largest producer of plasma-derived therapies.