Under a "three-part transaction", Novartis is to acquire the oncology business of GlaxoSmithKline for $16 billion, while GSK will buy the Swiss firm’s vaccines division for up to $7.05 billion, GSK said in a statement.
The two firms will also create a joint consumer health-care business producing non-prescription drugs, of which GSK will own 63.5 percent and Novartis 36.5 percent.
Speaking to newspaper Tribune de Geneve, Novartis boss Joseph Jimenez said the transaction poses no threat to the firm’s 1,500 jobs in Nyon and Basel.
The joint venture has the potential to generate $10 billion, reports the Tribune. In 2013 Novartis achieved sales of $2.9 billion in the non-prescription drugs sector.
The three deals are expected to be completed in the first half of 2015.
"These transactions mark a transformational moment for Novartis," Jimenez said in a statement, insisting that the deals would help give the Swiss company a sharper focus.
"Patients will benefit from even higher levels of innovation that this focus may afford," he said, pointing out that the agreements would also "improve our financial strength, and are expected to add to our growth rates and margins immediately."
GSK Chief Executive Andrew Witty said his company's agreements with Novartis accelerate the British firm's "strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings".
In a separate statement, US pharmaceutical giant Eli Lilly said it had reached an agreement to acquire the Novartis animal health division for $5.4 billion.