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Published on 15 December 2010

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Novatis-Alcon merger approved

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Novartis announced today that it has entered into a definitive agreement with Alcon, Inc. (Alcon; NYSE: ACL) to merge Alcon into Novartis for Novartis shares and a Contingent Value Amount (CVA).

Under the terms of the agreement, the merger consideration will include up to 2.8 Novartis shares and a CVA to be settled in cash that will in aggregate equal $168. If the value of 2.8 Novartis shares is more than $168 the number of Novartis shares will be reduced accordingly.

“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 Dr. Daniel Vasella, Chairman of Novartis.

“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 US,” said Joseph Jimenez, CEO 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.”

The new Alcon division will be led by Kevin Buehler, current 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,” said Kevin Buehler.

“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.”

Full ownership of Alcon provides Novartis with the opportunity to establish a fifth growth platform as part of its healthcare portfolio.

The eye care sector offers further growth opportunities underpinned by the increasing unmet needs of emerging markets and an aging population.

The Alcon and Novartis eye care portfolios address a broad range of these unmet needs.

The companies have complementary pharmaceutical portfolios for diseases in the front and back areas of the eye as well as strong global brands in lens care.

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.

Alcon, which is incorporated in Switzerland, is the world’s largest and most profitable eye care company with more than 15,500 employees in 75 countries and 2009 annual sales of $6.5 billion, operating income of $2.3 billion and net income of $2 billion.

Alcon offers a range of pharmaceutical, surgical and consumer eye care products to treat diseases, disorders and other conditions of the eye.



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