Novartis completes $28.3 billion purchase of majority interest in Alcon

Novartis AG and Nestlé S.A. announced August 26 that they have completed the purchase and sale of approximately 156 million shares of Alcon Inc. for US$28.3 billion in cash.

The transaction was consummated pursuant to an agreement between Nestlé and Novartis that was executed on April 6, 2008. With the completion of this transaction, Novartis is now Alcon’s majority shareholder and controls approximately 77 percent of Alcon’s outstanding shares. Effective immediately, the five Nestlé-designated members of the Alcon board of directors have tendered their resignations and the August 16, 2010 election of the five Novartis-designated directors is deemed effective.

“I would like to thank Nestlé for their outstanding contributions and support of Alcon for more than 30 years, which has been an important part of making Alcon the global leader in ophthalmology,” said Kevin Buehler, Alcon’s president and chief executive officer. “We now welcome Novartis as our new majority owner and look forward to working with them to further enhance Alcon’s business model, provide opportunities for future growth and deliver benefits to customers and patients around the world.”

The transaction announced by Nestlé and Novartis does not affect the remaining 23 percent of Alcon’s shares that trade publicly on the New York Stock Exchange. On January 4, 2010, Novartis proposed a merger of the two companies under Swiss merger law at a fixed exchange rate of 2.8 Novartis shares for each Alcon share which has a current value of approximately US$142. The Independent Director Committee (IDC) of Alcon’s board of directors reviewed this proposal and rejected it on January 20, 2010 based on inadequate value.

“While Novartis is now our majority owner, Alcon remains an independent, publicly-listed company, and it is important to maintain good corporate governance around related-party transactions,” added Buehler. “Alcon will continue to abide by the Organizational Regulations, which require the IDC to review and approve all related-party transactions, including the Novartis proposed merger.”

About Alcon

Alcon Inc. is the world’s leading eye care company, with sales of approximately $6.5 billion in 2009. Alcon, which has been dedicated to the ophthalmic industry for 65 years, 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.