Novartis takes total control of Alcon

In a $28Bn USD operation, the Swiss Pharmaceutical buys the 52% of Alcon’s remanent stock from Nestlé. Novartis would own an approximate 77 percent interest in Alcon.

The operation goes at least one and a half year earlier than estimated in the first deal announcement.

By Xavier Tello.

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During April 2008, Novartis announced it’s intention on buying worldwide ophtalmology-leader Alcon, in a phase-by-phase operation valued in $39Bn USD.

The first payment (due Apr 2008) was set in $11Bn, and the rest to be paid sometime between 2010 and 2011. (Read our Apr 2008 notice, in spanish HERE)

Today, the three companies: Nestlé, Novartis and Alcon had announced the buying of the remaining stock from Nestlé, in the remanent $28Bn USD.

In order to “avoid uncertainty and speculation on Alcon’s future“, Novartis is announcing a proposal for subsequent all-share direct merger of Alcon into Novartis.

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Betting for the future

We has commented in past issues about the future of the pharmaceutical business.

For all of us who have worked on it during the “great blockbusters’ era” of the 1990s, it is clear that the world have changed quite a lot. The reshaping of the business based on the end of blockbusters’ patents, the growing generic-drugs’ business and the new biotech therapies, has shown to bring new rules to the game.

Giant Pharma corporations like Pfizer and Merck did not hesitate on buying Wyeth and Schering-Plough in order to acquire portfoliosbiotech molecules or vaccines.

Sanofi-Aventis has chosen a different pathway by buying “small” companies, most of them with high experience in generics, as strengthening it’s vaccine business while cleaning their R&D portfolio and gaining profit.

As one of the big player in healthcare, Novartis must had to decide for a strategy that warrantied a safe pathway facing the new market paradigms. As Daniel Vasella (Chairman & CEO for Novartis) pointed this morning: “The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eye care, a sector with dynamic growth due to the increasing patient needs of an aging population”.

Thus, Vasella’s strategy is clear; Novartis will lead the eye-care sector through acquiring the business leader. Alcon has built a strong reputation in the therapy of Glaucoma and ophthalmic antibiotics; but it’s more well known amongst Ophthalmologists for its surgical refractive devices and intraocular lenses.

These will be very interesting times for Novartis and Alcon, as well as millions of patients that day ti day make the ophtalmology market to grow.

We will be following up this process.

 

 

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