Novartis plans Alcon bid worth $39 billion

Switzerland’s Novartis said Monday that it would spend about $39 billion in a two-step bid for a majority stake in U.S. eye-care company Alcon Inc.

Novartis will initially pay food and beverage giant Nestle $11 billion for a 25% share of the Texas-based company, which makes Opti-Free contact lens solution and has 14,500 employees worldwide.

Novartis will then have the exclusive right to buy Nestle’s remaining 52% stake in Alcon for about $28 billion from January 2010 to July 2011.

Although the second step is optional, both companies would have to agree not to exercise their rights for it to fall through.

“It is quite clear in the minds of the people and the companies who signed the contract that we expect this to go through,” Nestle spokesman Francois-Xavier Perroud said.

Nestle Chairman and Chief Executive Peter Brabeck-Letmathe said the deal was good for his company’s shareholders and that Novartis’ “activities are closely aligned with its own business.”

Analysts praised the sale as a significant success for Nestle, which snapped up Alcon in 1978 for $275 million.

The Vevey, Switzerland-based owner of brands such as Nescafe, Perrier and Dreyer’s has been spinning off its non-food business in recent years while expanding its footprint in the areas of nutrition, health and wellness.

Alcon shares rose $2.19, or 1.5%, to $150.63 on Monday.