Novartis wants all of Alcon for $49.8B

We didn't have to wait long for Nestle and Novartis to do their deal. Novartis will buy the rest of Nestle's stake in Alcon, the eye care company, for $28.1 billion, and it's offering to buy out minority shareholders--all 23 percent worth--as well.

Here's the math: Novartis paid $10.4 billion for its initial piece of Alcon last year, and it will pay another $28.1 billion for the rest of Nestle's share, bringing the total to $38.5 billion for 77 percent. If minority shareholders accept Novartis' offer of $11.3 billion of its shares for the remaining 23 percent, the total will be a whopping $49.8 billion for the whole shebang. The New York Times figures it's the most expensive buyout in Swiss history.

The deal is part of Novartis chief Daniel Vasella's diversification plans. The Swiss company already is into eye care in a smaller way--with drugs and contact lenses--but adding Alcon into the mix will make Novartis an eye-care behemoth with 70 percent of that market, the company says. The idea being that eye care is projected to grow faster than other sectors of the healthcare market, especially prescription drugs, offering Novartis a remedy for generic competition and other ills afflicting pharma.

The combo of Alcon with Novartis' Ciba Vision group will offer cost savings, too, Dow Jones points out. As much as $700 million in cost savings, analysts said, with a major chunk of that amount achieved via quick layoffs. The deal with Nestle is expected to close in the second half of 2010, with any minority share-swap happening after that.

- here's Novartis' release
- see the NYT story
- get more from the Financial Times
- read the Dow Jones article
- check out the news from MarketWatch