What's going on?

Swiss pharmaceutical giant Novartis announced it�s buying a promising US drugmaker: the $9.7 billion price tag might be a little hard to swallow, but a spoonful of sugar should help The Medicines Company go down.

What does this mean?

Novartis has made a string of acquisitions lately, and it�s likely decided to add The Medicines Company to that roster because of a particularly encouraging drug. The treatment looks set to help the millions at risk of cholesterol-related heart problems � making the drug a potential blockbuster if it�s approved. That might explain why The Medicines Company�s share price had tripled this year, even before the deal was announced�

Novartis�s purchase is its CEO�s latest attempt to transform the pharma company. Since he took the helm almost two years ago, he�s been aggressively getting rid of parts of the company not important to its core business, focusing instead on buying up the real money-spinners: cutting-edge cancer drugs and treatments for widespread diseases.

Why should I care?

The bigger picture: Drug deals.
Big pharma companies have recently tended to buy other companies� drugs to keep their portfolios fully stocked, rather than develop their own. Novartis, for one, plans to spend up to 5% of its market value every year on takeovers. It may be more expensive to buy out an entire company than create a drug from scratch, sure. But it�s safer, too: a pharma company can acquire a proven treatment that�s already passed its initial trial stages.

Zooming out: Merger Monday.
Another takeover making the rounds on Monday was luxury conglomerate LVMH, which bought US jeweler Tiffany & Co in the biggest luxury goods deal ever. LVMH agreed to pay a sparkling $16 billion for the jeweler � $1 billion more than it�d previously offered. Tiffany’s will hopefully enable it to better challenge Cartier-owner Richemont for dominance in the global jewelry business � one of the fastest-growing categories in the luxury goods sector.