Novartis To Acquire Majority Stake In Alcon

Novartis intends to gain full ownership of Alcon by completing the April 2008 agreement with Nestle to acquire a 77% majority stake in eye care and subsequently entering into an all-share direct merger with Alcon for the remaining 23% minority stake. This purchase will be funded from available liquidity and external debt financing.

Following the successful completion of the merger, Alcon would be established as a new Novartis division. According to Novartis the merger, which will be implemented under the Swiss Merger Act, is in the interest of all stakeholders and will provide the needed clarity on Alcon’s future.

Alcon and Novartis have global activities in eye care, each offering their own competitive positions in complementary segments that together cover more than 70% of the global vision care sector. Aligning these strengths can result in offering even more compelling products that make a difference for patients around the world.

Daniel Vasella, chairman and CEO of Novartis, said: “The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eye care, a sector with growth due to the increasing patient needs of an aging population.

“This is the right time to simplify Alcon’s ownership to eliminate uncertainties for employees and shareholders. It will also allow us to strengthen innovation power by combining R&D efforts and grow our global market presence thanks to our complementary product portfolios.”

The acquisition, which is subject to required regulatory approvals, is expected to be completed in the second half of 2010.