After 8 years under Novartis ownership, eye care devices maker Alcon has separated from the Swiss pharmaceutical giant and started operating as an independent, publicly traded company. On Tuesday (April 9), Alcon's shares began trading on the SIX Swiss Exchange and New York Stock Exchange (NYSE) under the symbol “ALC.”
As per the terms of the spin-off, each Novartis shareholder or American Depositary Receipt (ADR) holder received one Alcon share for every five Novartis or ADR shares they held at the close of business on April 1, 2019, resulting in the issuance of about 500 million Alcon shares.
Before U.S. markets opened, Alcon shares were trading at 55 Swiss francs. This corresponds to a total market capitalisation of around CHF 26.9 billion. Shortly after U.S. markets opened, Alcon’s American depositary receipts were trading at $57.81, giving the company a market value of about $29 billion.With more than 10 million shares changing hands, Alcon closed at $58.33 on its first day of tading. That price is above the $40 to $50 range some analysts had expected, according to Barrons.com.
"This listing marks a new chapter in the life of our company, all of us at Alcon are committed to addressing the growing consumer need for improved vision and eye health and to expanding access to quality eye care all around the world" David Endicott, Chief Executive Officer of Alcon said in a statement.
The eye care giant also noted in an announcement that as an independent company it will have more focus and flexibility in pursuing its own growth strategy driven by rapid iterative innovation. The company will have a distinct investment identity with a more efficient capital structure that will allow it to expand markets, enter promising adjacencies and introduce new business models.
Alcon, which has a presence in 74 countries and serves patients in more than 140, will be headquartered in Geneva, Switzerland. Its facilities in Fort Worth, Texas, will continue as an operational centre and innovation hub.
Last year, the company had sales of $7.1 billion, including $4bn and $3.1bn in its surgical and vision businesses, respectively. Alcon is expected to have revenues of about $7.4 billion this year. Eye care is an approximately $23 billion a year market, growing at roughly 4 percent annually.
Novartis, which acquired Alcon from Nestle in 2011, initially announced its plan to divest Alcon in January 2017. In June 2018, Novartis announced its intention to seek shareholder approval for the spin-off of its Alcon business into a separately traded company named Alcon Inc. On 28 February 2019, Novartis shareholders approved the proposed 100%spin-off of the Alcon eye care division to be implemented through the distribution of a dividend-in-kind of new Alcon shares to Novartis shareholders and American Depositary Receipt holders.
Alcon at a glance
Headquarters: Geneva, Switzerland
Revenues: $7.1 billion (2018)
Net Income: $974 million (Core) (2018)