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Novartis inks deal to buy rest of Alcon
December 15th, 2010
BASEL, Switzerland – Novartis has entered an agreement to acquire the remaining interest of eye care company Alcon Inc. that it doesn't already own.
Novartis said Wednesday that under the stock-and-cash deal, valued at $12.9 billion, it will purchase the remaining 23% interest in Alcon, giving it full ownership of the company.
The Swiss pharmaceutical giant unveiled plans in early January to seek a 100% merger with the eye care manufacturer. In late August, Novartis announced that it gained 77% control of Alcon after buying 52% of Alcon shares from Nestle for $28.3 billion. As the first step in its April 2008 agreement with Nestle, Novartis purchased 25% of Alcon's shares for $10.4 billion. That puts Novartis' total cost of acquiring Alcon at $51.6 billion.
Novartis said its board has unanimously approved the merger. The company expects the agreement to be completed in the first half of 2011, pending shareholder and regulatory approvals.
"The full merger is the logical conclusion of our initial strategic investment in Alcon. With this step Novartis takes full ownership, becoming the global leader in eye care, a rapidly expanding, innovative platform based on the growing needs of an aging population," said Novartis chairman Daniel Vasella said in a statement.
"The growth synergies here are significant, as Alcon will be the eye care development engine for our best in class research organization and will leverage the Novartis market access capabilities outside the U.S.," stated Joseph Jimenez, chief executive officer of Novartis. "I am very pleased that we were able to come to this agreement and will be able to provide Alcon employees the full benefits of being part of the Novartis Group."
After the agreement is finalized, plans call for Alcon to become the new eye care division of Novartis, including CIBA Vision and ophthalmic medicines. Pro forma sales of the new division in 2009 totaled $8.7 billion.
Novartis said the new Alcon division will be led by Kevin Buehler, currently president and CEO of Alcon Inc.
"This merger will create a stronger eye care business with broader commercial reach and enhanced capabilities to develop innovative eye care products that fulfill unmet clinical needs in eye care," Buehler commented. "The combination of Alcon's deep understanding of the eye care specialty and the broad expertise and scale of Novartis will address virtually all key areas of eye care and position the Alcon business unit for faster growth."