Novartis has entered into a definitive agreement with Alcon to merge Alcon into Novartis for Novartis shares and a Contingent Value Amount (CVA).
Alcon's board of directors approved a merger agreement with Novartis.
Under the terms of the agreement, the merger consideration will include up to 2.8 Novartis shares and a CVA to be settled in cash that will in aggregate equal $168. If the value of 2.8 Novartis shares is more than $168 the number of Novartis shares will be reduced accordingly.
The merger is currently expected to be completed during the first half of 2011 and is conditional on clearance of a registration statement by the US Securities and Exchange Commission, two-thirds approval by the shareholders of each of Novartis and Alcon voting at their respective meetings and other customary closing conditions.
Novartis said that following completion of the merger, Alcon will become the new eye care division of Novartis, including CIBA Vision and ophthalmic medicines.
After the merger, Alcon will be able to capitalise on commercial opportunities to develop and brand contact lenses collaboratively with contact lens solutions in order to capture new patients and increase the number of patients that use contact lenses to correct their vision.
Alcon president and CEO Kevin Buehler said that this merger will create a stronger eye care business with broader commercial reach and enhanced capabilities to develop more new eye care products that address unmet clinical needs in eye care.
Novartis CEO Joseph Jimenez said that the growth synergies are significant, as Alcon will be the development engine for their research organisation in eye care and will leverage the Novartis market access capabilities outside the US.