Swiss healthcare giant Novartis has acquired a 25 percent stake in Alcon as part of a definitive agreement with Nestlé reached in April 2008 that provides the right to acquire majority ownership of the world leader in eye care in two steps.

Alcon is one of the world’s largest eye care companies with 2007 annual sales of $5.6 billion, operating income of $1.9 billion and net income of $1.6 billion. Alcon offers a range of pharmaceutical, surgical and consumer eye care products used to treat diseases, disorders and other conditions of the eye. Alcon was spun off from Nestlé in 2002, with Nestlé remains the majority shareholder.

The first step of the acquisition was completed on July 7 when Novartis purchased the Alcon stake from Nestlé for approximately $0.4 billion in cash. This purchase price was approximately $200 million less than previously announced to account for the Alcon dividend paid in May 2008 for these shares to Nestlé rather than Novartis.

The optional second step provides rights for Novartis to acquire, and Nestlé to sell, the remaining 52 percent stake held by Nestlé between January 2010 and July 2011 for a price not exceeding approximately $28 billion.

Completion of the optional second step would make Alcon a majority-owned subsidiary of Novartis, strengthening a portfolio focused on growth areas of healthcare. This portfolio includes innovative medicines, generic pharmaceuticals, preventive vaccines, diagnostics and consumer health products.