Alcon and Novartis have finally agreed on the terms by which Novartis will buy the Alcon shares it does not already own. The total consideration is valued at $168 per Alcon share, made up of Novartis shares and, if necessary, cash to make up the difference. The exact ratio is yet to be calculated, but the total worth of the transaction is $12.9 billion.

Upon the advice of Alcon's independent financial adviser, Greenhill and Company, as well as a separate opinion from Lazard, Alcon's board of directors approved the merger agreement. It will go through under Swiss merger law and should be completed sometime in the first half of 2011. Two-thirds of the shareholders of both Novartis and Alcon have to OK the agreement at meetings whose dates have not been announced yet.

Kevin Buehler, the president and chief executive of Alcon, said that the merger would get the new entity to handle «virtually all key areas of eye care» with the combination of Novartis' expertise and size, and Alcon's knowledge of the eye care industry. Altogether it will cover more than 70 percent of the eye care segment and have sales of about $8.7 billion a year. From his position, Buehler will run the whole eye care division of Novartis, which will become the second-biggest unit of the pharmaceutical company. Novartis' Ciba Vision and some of the company's ophthalmic medicines will be absorbed into the new Alcon unit.

Alcon has more than 15,500 employees in 75 countries. In 2009, its annual sales were $6.5 billion, with operating income of $2.3 billion.