Definitive agreement with Nestlé S.A. provides Novartis the right toacquire 77% majority ownership of Alcon in two steps

  * Novartis to first acquire 25% stake from Nestlé for USD 143.18    per share for approximately USD 11 billion, closing expected in    second half of 2008  * In optional second step, Novartis has exclusive right to acquire    Nestlé's remaining 52% stake for a fixed price of USD 181 per    share, totaling about USD 28 billion; Nestlé has right to require    Novartis to buy this stakeAlcon the world leader in eye care with its pharmaceutical, surgicaland consumer eye care products, and a highly-rated developmentpipeline  * Eye care market growing dynamically, driven by increase in    age-related eye diseases, global expansion and novel therapies  * Strong strategic fit with complementary Novartis contact lens and    ophtha pharmaceutical businesses; synergies expected to be    realized in due time  * Definitive agreement with Nestlé S.A. provides Novartis the right    to acquire 77% majority ownership of Alcon in two steps     * Novartis to first acquire 25% stake from Nestlé for USD 143.18       per share for approximately USD 11 billion, closing expected       in second half of 2008     * In optional second step, Novartis has exclusive right to       acquire Nestlé's remaining 52% stake for a fixed price of USD       181 per share, totaling about USD 28 billion; Nestlé has right       to require Novartis to buy this stake  * Alcon the world leader in eye care with its pharmaceutical,    surgical and consumer eye care products, and a highly-rated    development pipeline     * Eye care market growing dynamically, driven by increase in       age-related eye diseases, global expansion and novel therapies     * Strong strategic fit with complementary Novartis contact lens       and ophtha pharmaceutical businesses; synergies expected to be       realized in due time

Definitive agreement with Nestlé S.A. provides Novartis the right toacquire 77% majority ownership of Alcon in two steps

  * Novartis to first acquire 25% stake from Nestlé for USD 143.18    per share for approximately USD 11 billion, closing expected in    second half of 2008  * In optional second step, Novartis has exclusive right to acquire    Nestlé's remaining 52% stake for a fixed price of USD 181 per    share, totaling about USD 28 billion; Nestlé has right to require    Novartis to buy this stakeAlcon the world leader in eye care with its pharmaceutical, surgicaland consumer eye care products, and a highly-rated developmentpipeline  * Eye care market growing dynamically, driven by increase in    age-related eye diseases, global expansion and novel therapies  * Strong strategic fit with complementary Novartis contact lens and    ophtha pharmaceutical businesses; synergies expected to be    realized in due time  * Definitive agreement with Nestlé S.A. provides Novartis the right    to acquire 77% majority ownership of Alcon in two steps     * Novartis to first acquire 25% stake from Nestlé for USD 143.18       per share for approximately USD 11 billion, closing expected       in second half of 2008     * In optional second step, Novartis has exclusive right to       acquire Nestlé's remaining 52% stake for a fixed price of USD       181 per share, totaling about USD 28 billion; Nestlé has right       to require Novartis to buy this stake  * Alcon the world leader in eye care with its pharmaceutical,    surgical and consumer eye care products, and a highly-rated    development pipeline     * Eye care market growing dynamically, driven by increase in       age-related eye diseases, global expansion and novel therapies     * Strong strategic fit with complementary Novartis contact lens       and ophtha pharmaceutical businesses; synergies expected to be       realized in due time

Basel, April 7, 2008 - Novartis has reached an agreement with NestléS.A. providing the right to acquire majority ownership of Alcon Inc.(NYSE: ACL) in two steps and add the world leader in eye care to itsdiversified portfolio focused on growth areas of healthcare.

The transaction's first step to purchase a 25% stake in Alcon fromNestlé for USD 11 billion is expected to be completed in the secondhalf of 2008. The second step provides rights for Novartis toacquire, and Nestlé to sell, the remaining 52% Alcon stake held byNestlé between January 2010 and July 2011.

Completion of these steps would make Alcon a majority-ownedsubsidiary of Novartis and further strengthen its healthcare-focusedbusiness portfolio of innovative medicines, high-quality low-costgenerics, preventive vaccines, diagnostics and consumer healthproducts, taking advantage of growth opportunities and cost synergieswhile mitigating risks.

The transition of Alcon's majority ownership to Novartis would alsoenhance the Group's longer-term growth prospects with greater accessto the fast-growing eye care market, a specialty field with unmetpatient needs and annual sales of about USD 25 billion in 2007.

Alcon is the world's largest and most profitable eye care companywith 2007 annual sales of USD 5.6 billion, operating income of USD1.9 billion and net income of USD 1.6 billion. Alcon offers a rangeof pharmaceutical, surgical and consumer eye care products used totreat diseases, disorders and other conditions of the eye.

"This acquisition furthers our strategy of accessing high-growthsegments of the healthcare market while balancing inherent risks. Thestrategic fit of Alcon and Novartis is excellent with ourcomplementary product portfolios and R&D synergies. Eye care willcontinue to grow dynamically as there is a growing unmet medical needdriven primarily by the world's aging population," said Dr. DanielVasella, Chairman and CEO of Novartis.

Alcon leads the world eye care market

Alcon is a high-performing and well-managed global leader in eyecare, with competitive leadership positions in all three of itsbusiness areas:

Surgical (2007 sales: USD 2.5 billion, +13%)

Alcon provides medical devices and products for ophthalmic surgery.The principal focus is cataract surgery where cataracts that cloudthe eye's lens are broken up, removed and then replaced by anartificial intraocular lens. Other products include devices forvitreoretinal surgery involving conditions such as retinaldetachment, macular holes and vitreous hemorrhage, as well asrefractive laser surgical devices used primarily for visioncorrection procedures. The surgical business area offers attractivegrowth prospects given the rising incidence of eye diseases alongwith the world's aging population, medical advances and expansion inemerging markets.

Pharmaceuticals (2007 sales: USD 2.3 billion, +15%)

Alcon offers a range of specialized medicines for many eye diseasesand conditions, including advanced treatments for glaucoma, eyeinfections and eye allergies. Leading products include TRAVATAN®solution for glaucoma, VIGAMOX® antibiotic solution for eyeinfections and the eye allergy solutions PATADAY® and PATANOL®.Strong double-digit sales growth has been achieved through marketshare gains, new product launches and global expansion.

Consumer (2007 sales: USD 0.8 billion, +15%)

Alcon provides an innovative portfolio of contact lens care products,including the OPTI-FREE® line, over-the-counter dry eye drops andocular vitamins. Market share gains and expansion outside the US havesupported recent growth.

Under the leadership of Cary Rayment, who has been with Alcon since1989 and will remain as Chairman, President and CEO, Alcon hasconsistently outperformed its industry peers thanks to its focus oninnovation, a broad product portfolio and strong sales force. Alcon'ssales have risen 13% annually between 2002 and 2007, with operatingincome rising at a faster 22% annual pace during the same period.

With 14,500 associates in 75 countries, Alcon's sales are splitnearly equally between the US and rest of the world, benefiting fromboth US and international expansion. Countries such as Brazil,Mexico, Russia and China are providing important contributions toAlcon's growth, with sales in emerging markets advancing 21% in 2007.

Alcon's broad and differentiated product range is underpinned by aconsistent commitment to innovation, with R&D investments of USD 564million in 2007 that represented 10% of sales. Over the next fiveyears, Alcon plans to invest at least USD 3.5 billion to support theexpansion of its pipeline, which includes more than 15 projects inlate-stage development.

Founded in 1945, Alcon has maintained its focus on advancingstandards for eye care. Alcon was acquired by Nestlé in 1978, andsubsequently spun off in a partial initial public offering in 2002 onthe New York Stock Exchange. Alcon is incorporated in Hünenberg,Switzerland, and its US operations are based in Fort Worth, Texas.

Transaction terms with Nestlé

Novartis and Nestlé have reached an agreement for a two-steptransaction providing a path for the transfer and smooth transitionto Novartis of Nestlé's ownership of 77% of Alcon's outstandingshares, which totaled 298.1 million as of April 4, 2008. Thesetransactions will require regulatory approvals.

In the first step, Novartis will acquire a 25% stake in Alcon forabout USD 11 billion through the purchase of approximately 74 millionshares held by Nestlé. This reflects a per-share price of USD 143.18,which is Alcon's volume-weighted average share price between January7, 2008, and April 4, 2008. Alcon's closing share price was USD148.44 on April 4, the last trading day before the signing of thisagreement.

In the second step, Novartis has the right to acquire Nestlé'sremaining 52% majority stake in Alcon between January 1, 2010, andJuly 31, 2011, for a fixed price of USD 181 per share, orapproximately USD 28 billion. During this period, Nestlé has theright to require Novartis to buy its remaining stake at a 20.5%premium to Alcon's share price at the time of exercise, but notexceeding USD 181 per share. Based on Alcon's closing share price onApril 4, 2008, the combined premium would be a maximum of 13% tocomplete the two steps. Novartis has no obligation to purchase theremaining 23% of shares held by Alcon minority shareholders at anytime.

Novartis intends to finance the purchase of the 25% Alcon stake inthe first step from internal cash reserves and external short-termfinancing, with borrowing needs currently estimated at USD 5.5billion. Financing for the second step would be supported by theGroup's ongoing cash generation and further external borrowing.

Potential strategic benefits and synergies

Following completion of the transaction's first step, Novartis willhave a representative on Alcon's Board of Directors. Alcon andNovartis will remain separate and independent companies.

If majority ownership is transferred from Nestlé during the secondstep, Novartis and Alcon will identify the best way to realizesynergies from combining their complementary eye-related businesses.

Potential benefits could include creating a broader portfolio of eyecare products, in particular with CIBA Vision's contact lens businessand Novartis medicines such as Lucentis® for severe eye diseases notaddressed by Alcon's portfolio. Other opportunities include R&Dactivities and an even more aggressive expansion in fast-growingregions, particularly Asia, where Novartis has long-standingoperations. In addition, the relationships of Novartis withhealthcare payors and strong health economics activities couldcontribute to Alcon's marketing programs.

On the other side, Alcon would help limit risks within the Novartisportfolio based on its diversified payor structure with reduced risksof price regulation, leadership in a specialty healthcare area, andgreater access to businesses with discretionary consumer spending.

Note to investors

Novartis will hold a conference call with financial analysts todiscuss this announcement on Monday, April 7, 2008, at 14:00 CentralEuropean Time. A simultaneous webcast of the call for interestedinvestors and others, as well as additional information on thistransaction, may be accessed by visiting the Novartis website atwww.novartis.com.

Disclaimer

This release contains certain forward-looking statements relating tothe proposed acquisition by Novartis of a majority stake in Alcon andto the Novartis Group's and Alcon's respective businesses. Suchforward-looking statements are not historical facts and can generallybe identified by the use of forward-looking terminology such as"expected", "will", "estimated", "would", "could", "potential","opportunities", "pipeline", or similar expressions, or by express orimplied discussions regarding potential future sales or earnings ofNovartis or Alcon or pending regulatory approvals; or by discussionsof strategy, plans, expectations or intentions or potentialsynergies, strategic benefits or opportunities that may result fromthe proposed acquisition. Such forward-looking statements reflect thecurrent plans, expectations, objectives, intentions or views ofNovartis with respect to future events and involve known and unknownrisks, uncertainties and other factors that may cause actual resultsto be materially different from any future results, performance orachievements expressed or implied by such statements. In particular,there can be no guarantee that the proposed transaction will becompleted in the expected form or within the expected time frame orat all. Nor can there be any guarantee that Novartis or Alcon, or anyof their divisions or business units, will achieve any particularfuture financial results or future growth rates or that Novartis andAlcon will be able to realize any of the potential synergies,strategic benefits or opportunities as a result of the proposedtransaction. Among other things, Novartis' expectations could beaffected by unexpected regulatory actions or delays or governmentregulation generally as well as other risks and factors referred toin Novartis AG's and Alcon Inc.'s current Forms 20-F on file with theUS Securities and Exchange Commission. Novartis is providing theinformation in this release as of this date and does not undertakeany obligation to update any forward-looking statements as a resultof new information, future events or otherwise.

About Novartis

Novartis provides healthcare solutions that address the evolvingneeds of patients and societies. Focused on growth areas inhealthcare, Novartis offers a diversified portfolio to best meetthese needs: innovative medicines, cost-saving genericpharmaceuticals, preventive vaccines and diagnostic tools, andconsumer health products. Novartis is the only company with leadingpositions in these areas. In 2007, the Group's continuing operations(excluding divestments in 2007) achieved net sales of USD 38.1billion and net income of USD 6.5 billion. Approximately USD 6.4billion was invested in R&D activities throughout the Group.Headquartered in Basel, Switzerland, Novartis Group companies employapproximately 98,200 full-time associates and operate in over 140countries around the world. For more information, please visithttp://www.novartis.com.

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