Nestle

(Bloomberg) — Novartis AG (NVS) offered to buy the rest of Alcon Inc. (ACL), the world's largest eye-care company, from Nestle SA (NSRGY) and minority shareholders for about $39.3 billion, as Chief Executive Officer Daniel Vasella expands into eye surgery.

Nestle will sell a 52 percent stake to the Basel, Switzerland-based drugmaker for an average of $180 a share, or a total of $28.1 billion, Novartis said today. Novartis also offered to pay 2.8 of its own shares for each remaining Alcon share held by the public, equivalent to about $11.2 billion, the company said.

Novartis is exercising a call option the Swiss companies agreed to in April 2008. By buying Alcon, the maker of Opti-Free contact lens cleaners, Novartis expands a portfolio of eye-care businesses including Ciba Vision and the Lucentis blindness medicine. Alcon had an operating profit margin of 35 percent in 2008 compared with Novartis's 22 percent. The drugmaker is counting on newer products to fuel growth as patents on the hypertension drug Diovan and the Gleevec leukemia treatment, its best sellers, start to expire in the U.S. in 2012.

"It's an excellent opportunity to acquire the world leader in eye care," Vasella said on a call with reporters. "Overall I think it's a great strategic fit and I'm very optimistic about the outlook of the business."

EYE SURGERY

Alcon got 46 percent of revenue from devices and products used in eye surgery in 2008. Its products include Opti-Free contact-lens disinfectants, treatments for eye infections and glaucoma, and machines used in cataract operations. The company's surgical business generated $2.9 billion in sales in 2008, while its pharmaceuticals unit had revenue of $2.6 billion. Sales of consumer products such as eye drops and ocular vitamins amounted to $800,000.

Nestle divested a 25 percent stake in the company to Novartis in July 2008 for $10.4 billion. Nestle, the maker of Nescafe coffee, said today it will buy back 10 billion francs ($9.6...