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"With this transaction, we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders."GSK said the agreement with Novartis "significantly exceeds GSK's returns criteria" and the transaction "would increase overall GSK revenues by £1.3bn to £26.9bn".Glaxo shareholders will get a £4bn capital return from the deal proceeds, the firm said. Source http://www.bbc.com/news/business-27107416

Could you please simplify the highlighted part talking about "returns criteria"?

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When you make an investment, you presumably expect some "return" on that investment, that is, you expect to get some money out of it. Like if you invest $10,000 and it produces $1,000 per year, you could say that you are getting $1,000 per year returns, or a return of 10% per year.

If a company has "returns criteria", that means that they have some rule or standard of what return they expect to get on an investment before they will make that investment.

So in this case, they're saying that the agreement with Novartis is expected to produce profits that are much more than the minimum that they require before they will make an investment.

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GSK has previously set some criteria required of any agreement or investment. For example, any agreement or investment must return at least 10% to even be considered.

They calculate the Novartis agreement will return 30% (for example) which greatly exceeds their 10% criteria.

  • +1 True. Exceed something is to be greater than a particular/traditional rate/pace in this case. – Maulik V Apr 22 '14 at 12:34

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