Novartis chairman floats idea of business review to appease investors ZURICH (Reuters) - Less than two weeks into the job, Novartis AG's (NOVN.VX) new chairman is seeking to appease investors by suggesting the Swiss drugmaker will review some of its underperforming businesses in coming weeks. Global drugmakers have stepped up the pace of restructuring, as investors clamor for management to unlock value trapped inside large firms. Basel-based Novartis has faced calls from investors and analysts to sell off or expand some of its smaller divisions, including its vaccines and diagnostics unit and the consumer health business which includes over-the-counter drugs and an animal health arm. In an interview published on Wednesday, chairman Joerg Reinhardt defended the firm's diversified strategy, but stressed Novartis would only hang on to businesses that are among world leaders. He also raised the specter that Novartis could make a $10 billion acquisition, which would be its first major deal since it bought the rest of leading eye care firm Alcon for $39.3 billion in 2010. A division should also be attractive enough from a financial point of view to be kept in our portfolio. It is clear to me that portfolio management at a company of our size must be actively pursued," Reinhardt, who took over as chairman at the start of August, told the Basler Zeitung newspaper. Rivals are doing the same. Abbot Laboratories (ABT.N) split off its innovative drugs into Abbvie (ABBV.N), and Pfizer (PFE.N) spun out its animal health unit into Zoetis (ZTS.N). British drugmaker GlaxoSmithKline (GSK.L) has also put its soft drinks brands Lucozade and Ribena up for sale. Reinhardt is no stranger to Novartis. He worked for the drugmaker for 28 years before leaving to go to Germany's Bayer (BAYGn.DE) after he lost out on the CEO job to Joe Jimenez. His comments show he is not afraid to dismantle the legacy of his predecessor, former chairman and CEO Daniel Vasella, the architect of the merger of Ciba-Geigy and Sandoz which led to the formation of Novartis in 1996. Birgit Kulhoff, a money manager at private bank Rahn & Bodmer who owns Novartis shares, says sticking to a diversified strategy would be acceptable for her, as long as Novartis takes steps to build up some of its smaller businesses. "I would like to see a Novartis that takes diversification seriously in terms of being among the market leaders in each of the business areas they participate in," she said. "They should either sell them off or increase their footprint," she said referring to its vaccines and diagnostics, and OTC and animal health business. Diversifying into vaccines looked like a good bet given it is a growing market and was meant to act as a prop for when Novartis lost exclusivity on its top-selling medicines. But the vaccine arm has struggled to catch up with the market leaders - GlaxoSmithKline, Sanofi (SASY.PA) and Merck (MRK.N) - and was the only one of the Swiss company's five divisions to report an operating loss in the second quarter. Reinhardt told the paper it was too early to make a decision on whether to sell the unit. He said he planned to meet with investors and other stakeholders this month to get acquainted with their opinion of the company. Kulhoff said Novartis may struggle to sell a non-performing vaccines business and could be better off integrating it into its pharma division or looking for a joint venture. Citi analyst Andrew Baum also questioned the vaccines business' independence from pharma. In a note, he suggested Reinhardt should look at divesting its OTC business and bulk up animal health either through acquisitions or a joint venture. Novartis' consumer health business, which last year struggled to resolve manufacturing issues at a plant in Nebraska, had sales of $1 billion in the second quarter. In terms of firepower for deals, Reinhardt told the paper that a $10 billion acquisition was not out of reach. The departure of Vasella in February has also prompted speculation as to whether Novartis will sell off its multi-billion stake on cross-town rival Roche (ROG.VX). <UD:nL6N0DP1ME> Novartis always saw this holding as a financial investment with strategic components. Nothing will change about that in the near future," Reinhardt told the paper. Editing by David Cowell