Novartis to buy Alcon in $40B deal
Novartis headquarters in Basel, Switzerland
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Bill Radke: How about a $40 billion, intercontinental deal to start your morning? The Swiss pharmaceutical giant Novartis is taking full control of the American eye-care company Alcon. Pharma companies expanding beyond drugs? We'll probably see more of it, as Marketplace's Stephen Beard reports.
John Dimsdale: This is a big deal, but not a big surprise. When Norvartis bought a small stake in Alcon in 2008, it reserved the right to buy the bulk of the company. Analysts say the deal makes perfect sense.
Justin Urquhart-Stewart is with Seven Investment. He says the takeover is aprt of a pharmaceutical industry trend; big companies have been diversifying away from their mainstay, prescription drugs.
Justin Urquhart-Stewart: You can have your blockbuster, but of course if your patent expires not just in America but elsewhere around the world, then immediately in will come the immitators and be able to copy that drug straight away -- and legitimately so. So what you need to be able to have is other legs to stand on.
But the Novartis deal could upset the regulators. It will give Novartis 70 percent of the global market in products like laser surgery equipment. It's a fast-growing market. The Swiss food giant Nestle, which is selling the Alcon shares, is making a profit worth more than 100 times its original investment.
In London, this is Stephen Beard for Marketplace.