With the completion of the first step transaction, Nestle remains Alcon’s majority shareholder with approximately 52% of Alcon’s issued capital and Novartis now owns a minority stake in Alcon equal to approximately 24.85% of Alcon’s issued capital.
As a result of Novartis’s minority investment in Alcon, the Alcon board of directors expands from eight to ten directors. James Singh, Nestle’s executive vice president and CFO, and Daniel Vasella, Novartis’s chairman and CEO, are the new Alcon directors.
In addition to this minority investment, the April 6, 2008 agreement provides Novartis with a call option to purchase Nestle’s remaining Alcon common shares. The agreement also provides Nestle with a put option to sell its remaining Alcon common shares to Novartis. These options commence on January 1, 2010 and expire on July 31, 2011.
If either of these options are exercised, and subject to the agreement’s closing conditions (including regulatory approval), Novartis would become the majority shareholder of Alcon with approximately 77% of its issued shares.