Will create a new eyecare group with Ciba Vision and ophthalmic medicines business
Swiss pharmaceutical firm Novartis has acquired the remainder of the shares in US eye care specialist Alcon for US$12.9bn.
Alcon will now be merged into Novartis, which will combine its Ciba Vision subsidiary and its ophthalmic medicines business into a new eyecare group, creating a company with annual sales of almost US$9bn. Kevin Buehler, current president and chief executive of Alcon, will head the new division.
Alcon's inclusion will add about $6.5bn in additional sales to Novartis, which in 2009 recorded turnover of about $44bn.
‘The growth synergies here are significant, as Alcon will be the eye care development engine for our best in class research organisation, and will leverage the Novartis market access capabilities outside the US,’ said Joseph Jimenez, chief executive of Novartis.
Alcon is a global leader in ophthalmic surgical products while Novartis has a broad contact lens portfolio and advanced eye care technologies and an early pipeline of innovative ophthalmic medicines.
‘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,’ added Buehler.
Novartis had previously estimated that the full acquisition of Alcon would help create synergies of about US$300m compared with the US$200m a year it estimated would come from a 77% control.
The Novartis board of directors have unanimously approved the merger, which is expected to be completed during the first half of 2011.
Under the terms of the agreement, Novartis said that for every Alcon share, shareholders in the US firm would get 2.8 Novartis shares and an additional cash payment, with the total combined value to reach US$168 per share.
If the value of the 2.8 Novartis shares is more than US$168, then the number of shares will be reduced accordingly.
The full acquisition of Alcon will cost Novartis about US$51.6bn. The company paid $38.5bn for Swiss food giant Nestlé’s 77% stake in 2008.