Novartis Signs Deal to Buy Alcon Stake
Nestle
agreed to sell a stake in eye-care products maker
Alcon
(ACL)
to fellow Swiss company
Novartis
(NVS) - Get Report
for roughly $11 billion, and the drug developer has an option to significantly boost its holdings in the future.
To begin, Nestle will sell 74 million of its Alcon shares to Novartis for $143.18 a share. When that deal closes, Novartis will own about 25% of Alcon's stock outstanding. Nestle would remain Alcon's majority shareholder with around 52% of the shares.
Between January 2010 and July 2011, Novartis will have the option to buy the rest of Nestle's Alcon stake in a deal that would be valued at about $28 billion.
Shares of Alcon were up 2.7% to $152.50 in premarket trading Monday. Novartis was down 2.5% at $50.80.
This article was written by a staff member of TheStreet.com.