Novartis and Nestle have announced the purchase and sale of approximately 156 million shares of Alcon, Inc. (NYSE: ACL) for USD$28.3 billion in cash.
The deal, completed following an April 2008 agreement between Nestlé and Novartis, positions Novartis as Alcon’s majority shareholder, with claim to 77 per cent of Alcon’s outstanding shares. The transaction will not affect the remaining 23 per cent of the company’s shares that trade publicly on the New York Stock Exchange, according to a press release from Alcon.
However, Novartis’ full merger proposal to acquire the remaining 23 per cent of Alcon stock held by minority shareholders – rejected by Alcon’s board of directors as “grossly inadequate” – stands at a fixed exchange ratio of 2.8 Novartis shares for each remaining Alcon share, currently valued at approximately USD$142.
Pursuant to the agreement, five Nestlé-allied members of Alcon’s board of directors have tendered their resignations and five Novartis-allied board members elected on 16 August have been activated into service, effective immediately.
On 4 January, 2010, Novartis proposed a merger of the two companies under Swiss merger law at a fixed exchange rate of 2.8 Novartis shares for each Alcon share which has a current value of approximately USD$142. The Independent Director Committee (IDC) of Alcon’s board of directors reviewed this proposal and rejected it on 20 January 2010 based on inadequate value.