Novartis Closes First Step in Alcon Deal

Swiss drugmaker Novartis (NVS Quote) announced early Tuesday that it completed the first step toward majority ownership of Swiss eyecare company Alcon (ACL Quote) -- the changing hands of 74 million shares of Alcon common stock to Novartis from Nestle for $10.4 billion.

In order to account for a dividend Alcon paid on the shares to Nestle, the price was $200 million less than the sum previously disclosed in April, according to Novartis.

Nestle now owns roughly 52% of Alcon issued capital, while Novartis owns about 24.8%. The Alcon board expanded from eight to 10 directors and now includes Nestle's chief financial officer James Singh and Novartis chief executive officer Daniel Vasella.

Per an agreement, Novartis has a call option to purchase Nestle's remaining shares, and Nestle has a put option to sell them to Novartis for no more than $28 billion between Jan. 1, 2010, and July 21, 2011.

American depositary shares of Novartis were up $1.36, or 2.4%, at $57.31 in recent trading Tuesday morning, while shares of Alcon edged down 55 cents, or 0.3%, at $162.10.