NOVARTIS yesterday said it wanted to buy the rest of leading eye care firm Alcon for $39.3bn (£24.3bn) to reduce reliance on prescription drugs, but is offering minority shareholders a worse deal than major owner Nestlé.
The Swiss drugmaker, which bought 25 per cent of Alcon in 2008, said it was exercising an option to buy a further 52 per cent from the world’s largest food group for $28.1bn, boosting its stake to 77 per cent.
Novartis, which was widely tipped to snap up the Nestlé stake as soon as its option allowed, also aims to buy out the 23 per cent held by minority shareholders for $11.2bn, ending uncertainty over whether or not it would seek full control.
Novartis and rival drugmakers such as GlaxoSmithKline and Sanofi-Aventis are pushing into areas like consumer healthcare and generics as they face the biggest loss of patent protection in history.
Novartis is offering minorities 2.80 Novartis shares for each remaining Alcon share, which amounts to $153 per share, based on 30 December prices, versus the $180 agreed with Nestle.
Under Swiss law, Novartis can force through the deal once it takes majority control from Nestlé as mergers require approval of two-thirds of shareholders and a simple board majority.
“We consider that the price we offer to minority shareholders is very fair. If this could be concluded faster that has a benefit. If not we have to wait until we have control of the company,” said Novartis chief financial officer Raymond Breu.
“It appears that Novartis has the upper hand due to unique circumstances related to Swiss merger law,” said Sanford Bernstein analyst Tim Anderson.
City A.M. Reporter