Novartis has revealed plans to spin-off its eye care division Alcon into a separately traded stand-alone company to facilitate each company to completely focus on their individual growth strategies.
The decision comes after Novartis carried out a strategic review of all potential approaches for Alcon, including retention, sale, initial public offering and spin-off.
Subject to general market conditions, regulatory and shareholder approvals, the spin-off is expected to be completed in the first half of next year.
Novartis chairman Joerg Reinhardt said: “The review concluded that a spinoff would be in the best interests of Novartis shareholders and the board of directors intends to seek shareholder approval for a spinoff at the 2019 annual general meeting.
“This transaction would allow our shareholders to benefit from potential future successes of a more focused Novartis and a standalone Alcon, which would become a publicly traded global medtech leader based here in Switzerland.”
Alcon, with activities in surgical, vision care and ophthalmic pharmaceuticals, was acquired by Novartis in 2011.
Novartis later initiated the creation of two businesses in 2016 by transferring Alcon’s ophthalmic pharmaceuticals to its Innovative Medicines unit. This ophthalmology pharmaceuticals business will continue to be part of Novartis after the spin-off of Alcon.
Alcon primarily works on surgical and vision care, and offers a portfolio of eye care devices.
Alcon CEO Mike Ball said: “The planned spinoff will be key to strengthening our leadership in the large, attractive and growing global eye care devices market.”
After the completion of the potential spin-off, Alcon will operate as an autonomous medical devices business in Switzerland, with more than 20,000 employees.
Novartis said that it will ensure the tranisition is smooth for both its and Alcon’s associates, and that changes are being made to Alcon’s leadership team.