Novartis has received approval from regulators in Europe to acquire eye specialist Alcon, subject to divesting certain products.
The European Commission has approved the deal under the EU merger regulation, which will see Novartis purchase the 52% stake in Alcon owned by Nestle for $180 per share in cash, which will give it a 77% holding in its fellow Swiss firm. The decision is conditional upon Novartis’ commitments to divest “several products in the ophthalmological pharmaceutical and consumer vision care areas”.
The Commission says it found that “competition concerns arose in a number of such markets because of the high combined market shares for certain products, the fact that Novartis’ and Alcon’s products are close competitors and because of the presence of barriers to entry”. The markets in question are ophthalmological anti-infective, anti-inflammatory/anti-infective combinations, anti-allergics, decongestants, antiseptics, mydriatics and cycloplegics, diagnostic agents, non-steroidal anti-inflammatories, injectable miotics, anti-glaucoma products, artificial tears, and multipurpose solutions for contact lenses.
The EC goes on to say that depending on the product in question, “competition concerns arose in either a few or a larger number of member states” and Novartis has offered to divest “a number of businesses across the European Economic Area in the product areas concerned. In view of these commitments, “and following a market test, the Commission concluded that the transaction would no longer raise competition concerns”.
The Commission’s stance has been echoed by the Competition Bureau of Canada which has backed the merger so long as a couple of products are divested. There are Solocare Aqua, a multi-purpose contact lens solution, Miochol (acetylcholine), an injectable miotic, and Zaditor (ketotifen), an ophthalmic anti-allergy agent.
The Alcon deal is still causing some consternation among minority shareholders of the eyecare group who are being offered much less than Nestle for their stake. A vote on the conditional election of Novartis’ board designees at an Alcon extraordinary general meeting is scheduled to take place on August 16 and is expected to be acrimonious.
