Alcon, Inc.
- Novartis to pay total merger consideration valued at $168 per
share, through a combination of Novartis shares and a contingent value
cash component
- Deal to be executed under Swiss Merger Act
- Alcon board approved merger after receiving favorable
recommendation from Independent Director Committee and considering,
among other things, a fairness opinion issued by Lazard
- New Alcon division of Novartis will have more than $8.7 billion in
sales covering more than 70% of eye care segment
- Combines Alcon's eye care leadership with Novartis's global scale
in health care
HUENENBERG, Switzerland, Dec 15, 2010 (BUSINESS WIRE) --
Alcon, Inc. (NYSE: ACL) announced today that its board of directors
approved a merger agreement with Novartis AG, whereby Novartis will pay
a total merger consideration valued at $168 per share for the Alcon
shares it does not currently own. Under the terms of the deal, the
merger consideration will be comprised of a combination of Novartis
shares and, if necessary, a cash contingent value amount to result in a
total value of $168 per share. The exact exchange ratio and cash
contingent value amount will be calculated based upon formulas set forth
in the merger agreement.
In accordance with Alcon's Organizational Regulations and after
receiving a fairness opinion from its independent financial adviser,
Greenhill & Co., the Independent Director Committee (IDC) recommended
approval of the merger agreement to the Alcon board. The board also
received a separate fairness opinion rendered by Lazard in connection
with the transaction. After considering these items and other
appropriate information and factors, the Alcon board approved the merger
proposal.
"This merger will create a stronger eye care business with broader
commercial reach and enhanced capabilities to develop more new and
innovative eye care products that address unmet clinical needs in eye
care," said Kevin Buehler, Alcon's president and chief executive
officer. "The combination of Alcon's deep understanding of the eye care
specialty and the broad expertise and scale of Novartis will allow us to
address virtually all key areas of eye care with quality products and
will position the Alcon business for faster growth."
"I congratulate the entire Alcon board, including the IDC, and Novartis
for achieving a favorable resolution on the merger in a manner
consistent with our Organizational Regulations. This now allows us to
begin planning for the integration and creation of a dynamic eye care
division within Novartis after final shareholder approval," added
Buehler. "I also thank our employees for their patience and for
maintaining their focus on Alcon's business activities during this
process."
Upon completion of the merger, Alcon will become the second largest
division within Novartis. CIBA VISION and select Novartis ophthalmic
medicines will be integrated into Alcon, forming an organization with
more than $8.7 billion in sales covering over 70 percent of the eye care
segment. The merger of the two organizations is expected to yield a
number of benefits to the company and its customers, including:
-
Increased commercial capability to accelerate sales growth and support
for our customers
-
Expanded ability to develop innovative eye care products that reach
the market faster
-
Greater patient and market access to advanced technologies
-
Enhanced product development and branding opportunities in contact
lenses and solutions
-
Cost efficiencies that can be reinvested in research and other growth
opportunities
The merger will allow Alcon to benefit from Novartis's global commercial
capabilities across multiple healthcare product categories. This
includes best-in-class reimbursement and market access capabilities that
can be leveraged to accelerate Alcon's growth around the world, such as
enhanced market access for advanced technology IOL's in Europe. The
combined company also will be even better positioned to capture growth
and market share in all geographic markets, especially in emerging
markets where there is high growth potential.
"Alcon is a great strategic fit for Novartis, as a science-based leader
in a high growth segment of healthcare. The growth synergies are
significant, as Alcon will be the development engine for our best in
class research organization in eye care and will leverage the Novartis
market access capabilities outside the United States," said Joseph
Jimenez, chief executive officer of Novartis. "I am very pleased that we
were able to come to this agreement and will be able to provide Alcon
employees the full benefits of being part of the Novartis Group."
The new eye care division will combine Alcon's in-depth scientific
knowledge of eye disease and clinical experience with the broad-based
research capabilities and resources of Novartis. This will allow for an
expanded commitment to research and development activities in eye care
with the goal of increasing new product discovery and development
productivity to generate differentiated products to sustain and
accelerate growth. This will mean more new products for eye care
professionals and their patients and increased opportunities for market
penetration in key market segments.
After the merger, the company will be able to capitalize 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.
Thomas Plaskett, chairman of the IDC, said, "This agreement is the
culmination of a lengthy and robust series of negotiations with Novartis
that resulted in a fair value for all stakeholders. We strongly believe
this agreement is in the best interest of Alcon and its shareholders and
we are delighted to recommend this negotiated transaction to the Alcon
Board of Directors."
The merger will be effected under Swiss merger law. Completion is
conditional, among other things, on two-thirds approval by the
shareholders of both Novartis and Alcon voting at their respective
meetings, and the registration and listing of Novartis shares on the SIX
Swiss Exchange and American Depository Shares on the New York Stock
Exchange to be issued as merger consideration. The date of the Alcon
shareholders' meeting to approve the merger will be announced in the
future and corresponding materials will be provided as they become
available. The merger is expected to be completed during the first half
of 2011.
Cravath, Swaine & Moore LLP and Homburger AG were legal advisers for
Alcon, while Sullivan & Cromwell LLP and Pestalozzi, Zurich represented
the IDC.
About Alcon
Alcon, Inc. is the world's leading eye care company, with sales of
approximately $6.5 billion in 2009. Alcon, which has been dedicated to
the ophthalmic industry for 65 years, researches, develops, manufactures
and markets pharmaceuticals, surgical equipment and devices, contacts
lens solutions and other vision care products that treat diseases,
disorders and other conditions of the eye. Alcon operates in 75
countries and sells products in 180 markets. For more information on
Alcon, Inc., visit the Company's web site at www.alcon.com.
Caution Concerning Forward-Looking Statements. This press
release may contain forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Any
forward-looking statements reflect the views of our management as of the
date of this press release with respect to future events and are based
on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these
forward-looking statements. There can be no guarantee that Novartis or
Alcon will achieve any particular future financial results or future
growth rates or that Novartis or Alcon will be able to realize any
potential synergies, strategic benefits or opportunities as a result of
the consummation of the proposed merger.Factors that might cause
future results to differ include, but are not limited to, the following:
the development of commercially viable products may take longer and cost
more than expected; changes in reimbursement procedures by third-party
payers may affect our sales and profits; a weakening economy could
affect demand for our products; competition may lead to worse than
expected financial condition and results of operations; currency
exchange rate fluctuations may negatively affect our financial condition
and results of operations; completion of the proposed merger with
Novartis; pending or future litigation, including with respect to the
proposed merger with Novartis, may negatively impact our financial
condition and results of operations; litigation settlements may
adversely impact our financial condition; the occurrence of excessive
property and casualty, general liability or business interruption
losses, for which we are self-insured, may adversely impact our
financial condition; product recalls or withdrawals may negatively
impact our financial condition or results of operations; government
regulation or legislation may negatively impact our financial condition
or results of operations; changes in tax laws or regulations in the
jurisdictions in which we and our subsidiaries are subject to taxation
may adversely impact our financial performance; supply and manufacturing
disruptions could negatively impact our financial condition or results
of operations. You should read this press release with the understanding
that our actual future results may be materially different from what we
expect. We qualify all of our forward-looking statements by these
cautionary statements. Except to the extent required under the federal
securities laws and the rules and regulations promulgated by the
Securities and Exchange Commission, we undertake no obligation to
publicly update or revise any of these forward-looking statements,
whether to reflect new information or future events or circumstances or
otherwise.