Novartis has begun the New Year by announcing a $39.3bn deal for Alcon, a leading maker of eye care products, eye-based pharmaceuticals and contact lens solutions.

Novartis purchased 25% of Swiss firm Alcon in April 2008 for $10.4bn and has now decided to exercise its option to buy a further 52% of the company from its owner Nestlé.

Novartis is proposing to buy out the minority 23% of Alcon shares with an issue of new Novartis shares worth $11.2bn.

Together, these transactions are estimated to cost approximately $38.5bn, and at an average cost of $168 per share, which reflects a 17% premium over $143.18, which was agreed on as Alcon’s market price by Novartis and Nestlé in April 2008.

The acquisition will complement and add to Novartis’ eye care range, with the merger expected to cover around 70% of the global vision care sector.

Alcon is a global leader in cataract and vitreoretinal surgery, and provides a portfolio of contact lens care products, over-the-counter dry eye drops, as well as a portfolio of speciality pharmaceuticals for eye diseases, including glaucoma and conditions in the front of the eye such as infections and allergies.

Novartis chairman and CEO Dr Daniel Vasella said that the addition of Alcon will strategically strengthen the company’s position in a sector with dynamic growth due to the increasing patient needs of an ageing population.

“It will also allow us to strengthen innovation power by combining R&D efforts and grow our global market presence thanks to our complementary product portfolios,” Vasella said.

After the merger, the new Novartis eye care division will include Alcon, CIBA VISION and selected ophthalmic medicines.