Biotech Values

[DewDiligence]

Many analysts believe Novartis will bide its time – or may even be happy to run Alcon holding a 77 per cent stake – in spite of foregoing extra synergies arising from full ownership and integration. “The intention is to have 100 per cent. But Nestlé owned 77 per cent and the company was run very successfully for many years, so we have not ruled that out.”

This is a bluff, IMO, and not an especially convincing one.

There’s no way NVS will be satisfied to have 23% of Alcon owned by minority shareholders indefinitely. The Nestlé comment above is silly insofar as Nestlé is a food company; unlike NVS, Nestlé could not realize any consequential synergies from owning 100% of Alcon rather than 77%.