Last week, we reported that analysts are expecting Novartis to follow through on its deal to buy the rest of Nestlé's stake in eye-care expert Alcon. Now we're hearing that the Swiss drugmaker plans to fund that purchase via a mix of bonds and loans. And in going to the market for financing, Novartis may get better terms than it did in 2009.
Capital markets have rebounded since then, Bloomberg reports, and so has demand for healthcare bonds. So if Nestlé exercises its option to sell 52 percent of Alcon shares to Novartis next week--as some analysts are predicting--the company could get financing at between 4 percent and 4.5 percent, analysts say. The company could also sell off some Roche shares to raise money, Bloomberg notes.
Novartis had some $14.2 billion in cash on the books as of Sept. 30. That would leave $14 billion remaining to be financed. If Nestlé does jump at its chance to sell the Alcon stock in early January, we'll find out then just how Novartis plans to make up that difference.
- read the Bloomberg story