Novartis Closes First Step in Alcon Deal - TheStreet

Swiss drugmaker


(NVS) - Get Report

announced early Tuesday that it completed the first step toward majority ownership of Swiss eyecare company



-- the changing hands of 74 million shares of Alcon common stock to Novartis from


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.