Nestle sells minority share in eye care giant to Novartis

Basel, SwitzerlandNestle - Nestle announced Monday it is to sell a 25 per cent stake in its eye care products company Alcon to Novartis, Switzerland's second largest pharmaceutical company for 11 billion dollars.

Alcon describes itself as the world leader in eye care treatments with sales of 5.6 billion a year in 2007.

The deal, subject to regulatory approval, would give Novartis a minority holding with an option to acquire the rest of the Swiss food company's 52 per cent share holding in Alcon that runs from January 2010 to July 2011.

Novartis agreed to pay 143.18 dollars per share for the first tranche of 74 million shares and fixed a price of 281 dollars per share for the remainder.

Nestle acquired Alcon, based in Hunenberg, Switzerland, in 1977, but has decided it is no longer strategically necessary. It would use the money to reduce debt, the company said in a statement. The proceeds would also be used to expand the group's nutrition, health and wellness orientation.

The deal gives Novartis treatments for glaucoma and cataract surgery products.

Nestle hoped the sale would boost share earnings in 2008.

Chairman and CEO of Nestle Peter Brabeck-Letmathe, said: "Nestle has been able to take a further step in realizing shareholder value from its long-term Alcon investment. Alcon benefits from having a new minority shareholder." (dpa)