Alcon, Inc. has approved a merger agreement with Novartis AG, under which Novartis will pay $12.9 billion for all outstanding Alcon shares. When the merger is complete, Alcon will become the second largest division within Novartis. CIBA Vision and select Novartis ophthalmic medicines will be integrated into Alcon. The organization will have more than $8.7 billion in sales covering approximately 70% of the eye care market.

“This merger will create a stronger eye care business with broader commercial reach and enhanced capabilities to develop more new and innovative eye care products that address unmet clinical needs in eye care,” said Kevin Buehler, Alcon’s president and chief executive officer. “The combination of Alcon’s deep understanding of the eye care specialty and the broad expertise and scale of Novartis will allow us to address virtually all key areas of eye care with quality products and will position the Alcon business for faster growth.”

“Alcon is a great strategic fit for Novartis, as a science-based leader in a high growth segment of healthcare. The growth synergies are significant, as Alcon will be the development engine for our best in class research organization in eye care and will leverage the Novartis market access capabilities outside the United States,” said Joseph Jimenez, chief executive officer of Novartis. “I am very pleased that we were able to come to this agreement and will be able to provide Alcon employees the full benefits of being part of the Novartis Group.”

The merger is expected to close during 1H11.