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ZURICH, April 7 (Reuters) - Novartis AG NOVN.VX has agreed to buy Nestle AG’s NESN.VX 77 percent stake in U.S. company Alcon ACL.N for $39 billion to boost its eye care business, the Swiss drugmaker said on Monday.
Novartis will acquire a first, 25 percent stake in Alcon for $11 billion and has an option to buy Nestle’s remaining 52 percent stake for a fixed price of $28 billion between January 2010 and July 2011.
Novartis said it would finance the purchase of the first stake in Alcon from its cash reserves and external short-term financing.
It would finance a possible buy of the second stake from cash and further borrowing.
Nestle said the transaction would have a positive effect on its 2008 earnings per share and proceeds from the sale would be used to reduce debt. (Reporting by Sam Cage; Editing by Erica Billingham)