Swiss pharma major Novartis will buy an additional 52% stake in eye-care firm Alcon, owned by Nestle, for an estimated $28.1 billion. Novartis, which already paid $10.4 billion for a 25% shareholding in the company, will pay $180 per share for the 52% stake. With the purchase of a majority stake, the total shareholding of Novartis in the eye-care firm would be 77%.

Alcon Inc, one of the world?s leading eye care companies, had a sales of approximately $6.3 billion in 2008. The 65-year old Alcon 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.

Alcon has a subsidiary in India, Alcon Laboratories (India) Pvt Ltd, or Alcon India, established in 1989 in Bangalore with over 200 employees focused on marketing and selling a full range of ophthalmic pharmaceuticals surgical equipment and supplies.

?The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eye care, a sector with dynamic growth potential due to the increasing patient needs of an aging population,? said Daniel Vasella, chairman and CEO of Novartis. ?This is the right time to simplify Alcon?s ownership to eliminate uncertainties for employees and shareholders. 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 said. ?Together, these transactions are estimated to cost approximately $38.5 billion, and at an average cost of $168 per share,? the statement noted. Subject to regulatory approvals, Novartis? acquisition of 52% stake is expected to be completed in the second half of 2010. The purchase would be funded with available liquidity and external debt financing, it said.

>Novartis had submitted a proposal to the Alcon board of directors relating to the remaining approximate 23% publicly-held minority interest pursuant to which Alcon would merge with and into Novartis under Swiss merger law and minority holders of publicly-held shares would receive 2.8 Novartis shares for each of Alcon?s publicly-traded shares.

Based on the Novartis share price on December 30, 2009, Novartis? merger proposal values each publicly-traded share of Alcon at approximately $153. The proposed merger would be conditioned upon, among other things, approval by the Alcon board, the closing of the purchase and sale transaction between Novartis and Nestle relating to the Novartis option exercise as well as receipt of required regulatory approvals.

A Novartis statement said, ?Alcon and Novartis have attractive global activities in eye care, each offering their own competitive positions in highly complementary segments that together cover more than 70% of the global vision care sector. Aligning these strengths can result in offering even more compelling products that make a difference for patients around the world.? The Novartis board of directors believes it is in the best interest of all stakeholders ? the shareholders of Alcon and Novartis, their employees and the patients who benefit from their products ? to simplify Alcon?s ownership structure by making a proposal to acquire the remaining 23% held by minority shareholders. Alcon will be an important contributor to Novartis, with its associates constituting the major part of a new eye care division that will benefit from access to the Group?s global operations, expertise and resources. Attaining 100% ownership will also avoid speculation about the minority stake and enable the companies to move faster to achieve the full potential of the combined businesses, the statement added.

Completion of the merger is expected to provide additional annual pre-tax cost synergies of approximately $100 million.