Swiss pharmaceutical giant Novartis has agreed to acquire a majority stake in the world's largest eye care company Alcon for $28.1 billion in a second-stage transaction and has proposed a merger for full ownership.
After acquiring a minority 25-per cent stake in the Hünenberg, Switzerland-based Alcon, which was majority owned by Swiss food and beverage giant Nestle, for $11 billion in April 2008, (See: Novartis to acquire Nestle stake in eye care major Alcon for $11 billion) Novartis said today that it is exercising its call option to buy additional 52 per cent stake for $180 per share, or $28.1 billion.
Basel-based Novartis said that it would increase its stake in Alcon to 77 per cent at a cost of approximately $39 billion, or $168 per share.
Novartis is also seeking a subsequent complete direct merger of Alcon into Novartis to avoid uncertainty and speculation on Alcon's future in interest of all stakeholders at a fixed exchange ratio of 2.80 Novartis shares for each remaining Alcon share - a 12 per cent premium to the unaffected Alcon share price of $137.
The proposed complete merger is subject to closing of Nestlé transaction, implied cost for 23 per cent minority stake of $11.2 billion, or $153 per Alcon share, said Novartis.
Nestle has been spinning off its non-food business in recent years, while expanding in the areas of nutrition, health and wellness. In 2007, it bought the medical nutrition and Gerber baby foods units from Novartis for about $8 billion.