Novartis is planning to spin off Alcon into a separately traded stand-alone company.
The split, which is subject to general market conditions, tax rulings, shareholder approval and board of directors endorsement, will allow both companies to “focus fully on their respective growth strategies,” according to a Novartis press release.
The ophthalmology pharmaceuticals business will continue to be part of Novartis, while Alcon will focus on surgical and vision care.
In addition, Novartis said it will initiate a share buyback of up to $5 billion by the end of 2019.
“Our strategic review examined all options for Alcon ranging from retention, sale, IPO to spinoff. 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],” Novartis Chairman Joerg Reinhardt said in the release.
Mike Ball will become chairman-designate of Alcon, while David Endicott will be promoted to Alcon CEO, according to the release. Both appointments will become effective July 1.
“This promises to be the beginning of an exciting new chapter for everyone associated with Alcon,” Ball said in the release. “The planned spinoff will be key to strengthening our leadership in the large, attractive and growing global eye care devices market.”
If all approvals are secured, the spinoff would be completed in the first half of 2019. The company would be based in Switzerland, and Fort Worth, Texas, would “continue to be a key location for Alcon,” the release said.