Swiss pharmaceutical group Novartis said on Jan. 4 that it had bought a controlling stake in the world's biggest eye-care firm Alcon from Nestle and that it was seeking full ownership of Alcon.
"Novartis intends to gain full ownership of Alcon Inc. by first completing the April 2008 agreement with Nestle S.A. to acquire a 77% majority stake in a global leader in eye care and subsequently entering into an all-share direct merger with Alcon for the remaining 23% minority stake," said the pharmaceutical company said.
Novartis had announced a deal with Nestle last year to buy about a quarter of Alcon for $10.4 billion, with an option to purchase Nestle's additional 52% majority stake from January 2010.
On Jan. 4, the drug company said it has decided to acquire the 52% stake for $28.1 billion, and that it would also buy remaining Alcon shares held by minority shareholders for $11.2 billion. This values the complete purchase of the eye care firm at $49.7 billion.
The pharmaceutical group said full ownership of the eye-care firm could generate cost savings, as well as provide "the much needed clarity on Alcon's future."
"This is the right time to simplify Alcon's ownership to eliminate uncertainties for employees and shareholders," said Daniel Vasella, Novartis chairman and chief executive. "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," he added.
The group acknowledged that job cuts would be made following the acquisition, although it said that the "strong growth outlook in eye care is anticipated to compensate for integration-related workforce reductions."
Copyright Agence France-Presse, 2010