Novartis offers $39.3B for control of Alcon

Novartis has struck a deal to acquire a majority interest in Alcon for $28.1 billion, snapping up Nestle's 52 percent interest in the global eye care company as the Swiss pharma company claims control of a growing drug company with an impressive R&D arm. Novartis, which bought a $10.4 billion chunk of Alcon equity last year, also offered to trade $11.2 billion worth of its shares for the 23 percent of the company owned by minority shareholders.

Once the deal is wrapped in the second half of this year, Novartis will have control of a pharma company with 15,000 workers, including 1,300 in R&D. Alcon markets specialty drugs for glaucoma and diseases that afflict the front of the eye. And it has a variety of experimental drugs in the pipeline. In 2008, Alcon spent $619 million on research and development.

The deal to buy up control of Alcon fits in nicely with Novartis' plans to aggressively buy its way into growth markets. Novartis has been investing heavily in generics and the vaccines business and clearly sees a big future for new eye treatments. Novartis is willing to spend close to $50 billion for complete ownership of Alcon, which would beat the $46.8 billion price tag for Roche's acquisition of Genentech. And that makes the Alcon buyout the biggest M&A deal in Swiss pharma history. 

"This new eye care division will have enhanced opportunities to accelerate expansion in high-growth regions, generate greater value from combined product portfolios and capitalize on strengthened R&D capabilities," said Novartis in a statement.

- check out Novartis' release
- here's the story from the New York Times
- and here's the Bloomberg piece

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