5 January 2010 | Jake Kanter
Pharmaceutical firm Novartis is aiming to save $200 million (£125 million) after buying the controlling share of global eyecare company Alcon.
The Swiss giant announced yesterday it would spend $28.1 billion (£17.6 billion) on raising its stake in Alcon - a major supplier of contact lenses and eye surgery - to 77 per cent. It is exercising its call option to buy 52 per cent from Nestlé, which is based on an agreement made in April 2008. Novartis then plans to spend a further $11.2 billion (£7 billion) on the remaining shares in Alcon, which has headquarters in the US and Switzerland.
Savings will be made over three years through supply chain improvements, introducing shared services agreements and combining back-office functions. Novartis said it was too early to say if the firms’ procurement departments will be consolidated.
A further $100 million (£63 million) in cutbacks would be possible when a full merger is completed, Novartis added.
Novartis said the two companies have complementary product portfolios and between them now cover more than 70 per cent of “global vision care sector”.