Novartis and Alcon, Inc. have both announced that Novartis will acquire a majority control of Alcon. Novartis (global headquarters in Basel, Switzerland) specializes in pharmaceuticals and generic pharmaceuticals, vaccines and diagnostic tools, and other consumer health products. Alcon, Inc., is incorporated in Switzerland and has U.S. operations based in Fort Worth, TX, and has a portfolio of surgical, pharmaceutical and consumer eye care products. Novartis has also proposed a merger for full ownership of Alcon. Through the acquisition, Novartis and Alcon's portfolios will cover 70% of the global vision care sector.

In a Novartis press release, the company states it intends to obtain full ownership through first completing an April 2008 agreement with Nestle S.A. and acquiring a 77 percent majority stake. Subsequently, the company plans to enter an all-share merger with Alcon for the remaining 23 percent minority stake.

"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," said Dr. Daniel Vasella, Chairman and CEO of Novartis, in the company's press release. "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."
Novartis points out in its announcement that it shares complementary eye care businesses with Alcon, and that the collective strengths of the companies can result in more "compelling products" for global patients.

Nestle S.A. acquired Alcon in 1978. The company became publicly traded company in 2002 when Nestle sold 25% of its shares on the New York Stock Exchange. Alcon stated in its press release that the proposed merger would be conditioned in part upon approval by the Alcon Board of Directors, the closing of the purchase and sale transaction between Novartis and Nestle relating to the Novartis option exercise, and receipt of required regulatory approvals. Alcon says that based upon the Novartis share price on December 30, 2009, the Novartis' merger proposal values each publicly-traded share of Alcon at approximately U.S. $153.

The Alcon Board of Directors established an Independent Director Committee of the Alcon Board of Directors in 2008. This Independent Director Committee will review the Novartis merger proposal along with independent legal and financial advisors in order protect the interest of the minority holders of the publicly-held Alcon shares and to obtain the best value for those holders. The Committee has stated that neither itself nor the management of Alcon participated in the preparation of the merger proposal. The Committee will inform the Alcon shareholders of the Committee's formal position on Novartis' merger proposal upon completion of the evaluation.

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