Novartis AG Gains Control of Majority Stake Of Alcon (ACL)
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Novartis AG (NYSE: NVS) said Thursday it has completed its acquisition of a majority stake in Alcon Inc. (NYSE: ACL), saying that it is committed to gaining full control of the company despite a dispute over the rights of Alcon's minority shareholders.
Novartis paid $38.7 million for approximately 156 million shares of Alcon from Nestle SA, and now controls 77 percent of Alcon's outstanding shares. Novartis hopes the deal will boost its position in the rapidly-growing eye-care market, specifically in Asia. The company said that the deal could create annual synergies of roughly $200 million through leveraged marketing.
The Swiss pharmaceutical company paid a premium for the stake from Nestle, but said that it was justified to gain the majority control of Alcon.
Alcon's independent board has fought to keep Novartis from gaining control saying that its offer to minority shareholders was too low.
“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," said Kevin Buehler, Alcon’s president and chief executive officer. "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."
The minority shareholders of Alcon could see the offer price for their share improve if the stock value of Novartis increases over the next few weeks.
"An agreed transaction is in the best interests of all stakeholders and is clearly preferable to protracted litigation, which would delay critical steps in the integration process," said Thomas G. Plaskett, Chairman of Alcon's independent director committee. "However, we are ready to defend the rights of Alcon and its minority shareholders if Novartis refuses to negotiate a fair deal."
Shares of Novartis are up 34 cents to $50.90 in midday market movement on Thursday, While shares of Alcon are down $1.30 to $159.07.
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Novartis paid $38.7 million for approximately 156 million shares of Alcon from Nestle SA, and now controls 77 percent of Alcon's outstanding shares. Novartis hopes the deal will boost its position in the rapidly-growing eye-care market, specifically in Asia. The company said that the deal could create annual synergies of roughly $200 million through leveraged marketing.
The Swiss pharmaceutical company paid a premium for the stake from Nestle, but said that it was justified to gain the majority control of Alcon.
Alcon's independent board has fought to keep Novartis from gaining control saying that its offer to minority shareholders was too low.
“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," said Kevin Buehler, Alcon’s president and chief executive officer. "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."
The minority shareholders of Alcon could see the offer price for their share improve if the stock value of Novartis increases over the next few weeks.
"An agreed transaction is in the best interests of all stakeholders and is clearly preferable to protracted litigation, which would delay critical steps in the integration process," said Thomas G. Plaskett, Chairman of Alcon's independent director committee. "However, we are ready to defend the rights of Alcon and its minority shareholders if Novartis refuses to negotiate a fair deal."
Shares of Novartis are up 34 cents to $50.90 in midday market movement on Thursday, While shares of Alcon are down $1.30 to $159.07.
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