Novartis completes merger with Alcon
13 April 2011
Novartis has completed the merger of Alcon, Inc. (Alcon; NYSE:
ACL) into Novartis. The completion of the merger
follows the approval of both Alcon and Novartis shareholders last week.
Alcon, Inc. had sales of approximately $7.2 billion in 2010. The
company has been producing ophthalmic products for 65 years. It
researches, develops, manufactures and markets pharmaceuticals,
surgical equipment and devices, contacts lens solutions and other
vision care products that treat diseases, disorders and other
conditions of the eye. Alcon operates in 75 countries and sells
products in 180 markets.
Alcon will be a new division in Novartis and the second biggest
in the company after Pharmaceuticals. The division will be headed by
Kevin Buehler, former chief executive of Alcon.
Novartis Chief Executive Joseph Jimenez said: "Novartis
strategy is based on high-growth, science-based segments of
healthcare, and Alcon is a great fit with our portfolio.
Together, Novartis and Alcon will hold competitive positions in
highly complementary product areas and create an even stronger
global leader in the dynamic eye care sector. And in eye care,
just as in other Novartis growth platforms, innovation is
fundamental to success. Access to ophthalmology research
programs at the Novartis Institutes for BioMedical Research will
provide a powerful drug discovery engine for the new division."
The number of Novartis shares required in connection with the
merger are 165 million shares instead of the initially expected 215
million shares. The amount of shares required for the merger was
reduced through the purchase of 16.1 million Alcon shares in the
open market since the announcement of the merger agreement in
The 165 million shares are composed of 108 million newly issued
shares from the authorized capital increase approved by the Novartis
Board of Directors and 57 million shares already held as treasury
shares. Under the terms of the agreement, Alcon shareholders will
receive 2.9228 Novartis shares (which includes the dividend
adjustment) and US$8.20 in cash for each share of Alcon, for a total
consideration of US$168 per share.
Novartis says that a full update on expected synergies, one-time
costs and progress of integration process resulting from the merger
will be provided with the Novartis quarterly earnings update on
April 19, 2011.