Nestlé to Sell Remaining Alcon Shares to Novartis

The transaction is subject to regulatory approval and Nestlé expects the process to be completed around the middle of 2010. The amount is payable on completion of the sale.

4 Jan 2010 --- Nestlé S.A. has announced that, in accordance with the contract agreed on 6 April 2008, Novartis has exercised its call option to buy from Nestlé its remaining interest of 156,076,263 shares in Alcon, representing around 52% of the company's issued and outstanding share capital for a total of around USD 28 billion in cash. The transaction is subject to regulatory approval and Nestlé expects the process to be completed around the middle of 2010. The amount is payable on completion of the sale.

Alcon was acquired by Nestlé in 1977 for USD 280 million. Since its acquisition, Nestlé has continuously supported the strengthening of Alcon’s R&D capabilities and its drive for internationalisation, which has enabled Alcon to build a significant global leadership position in the eyecare business. Taking into account the three steps of the gradual divestment of Alcon - the initial IPO of 23.25% in 2002, the sale of 24.8% in 2008 and the exercise of the call option by Novartis -, Nestlé will have realised in excess of USD 40 billion in cash. This gradual divestment has ensured that Nestlé has achieved full and fair value for its shareholders. With the transfer of control from Nestlé to Novartis, Alcon will benefit from its relationship with a leading global pharmaceutical company, whose R&D capabilities are more closely aligned to develop the business going forward.

The Board of Directors thanked the Alcon management for its collaboration and commitment over the many years to build the business to its current international stature and to create significant value for its shareholders. At the same time Nestlé announced its intention to launch an additional share buy-back programme of CHF 10 billion commencing in 2010 for two years, once the existing programme of CHF 25 billion has been completed. Nestlé will make the necessary filings with the Swiss Takeover Board in due course.

Peter Brabeck-Letmathe, Chairman of Nestlé S.A., said: "Over the years Nestlé’s financial and operational support has allowed Alcon’s management to focus on its fantastic development from a minor player to global leadership in the ophthalmologic business. I would like to thank the managements of both Alcon and Nestlé for their work in building such a successful business and I am sure that with Novartis we have found the right partner for Alcon’s promising future."

Nestlé CEO Paul Bulcke said: "I am happy to be part of this successful creation of shareholder value by Nestlé. This divestment of our interest in Alcon will enable our management to concentrate on accelerating the development of Nestlé’s position as the world's leading nutrition, health and wellness company."

With effect from 2009 Nestlé will report the results of Alcon as a discontinued operation until the sale of the shares is completed.