Switzerland's Novartis has agreed to buy a majority stake in eye care group Alcon for $28.1 billion, further diversifying its business away from prescription drugs to ensure more stable cash flows.
Novartis said today it would boost its stake in Alcon to 77 per cent, pushing through the second stage of a deal to buy shares from the world's largest food group Nestle.
Drug developers like Novartis, GlaxoSmithKline and Sanofi-Aventis are pushing into areas like consumer healthcare and generics as they face the biggest loss of patent protection in history.
Nestle said in a separate statement it would launch a new share buyback programme for two years once its existing programme is completed this year.
Analysts have speculated it could also use some of the Alcon proceeds for acquisitions, with the fiercest speculation around whether it might enter the fray for British chocolatier Cadbury and bid against Kraft Foods.
Novartis had already bought a 25 per cent stake in Alcon from Nestle in 2008 in the first part of the deal, which included an option to buy another 52 per cent between January 2010 and July 2011.
Reuters