Protecting investors

On December 15, 2010, after 11 months of legal standoff, the Swiss corporation Novartis finally closed a deal to acquire the remaining shares of eye-care company Alcon from minority shareholders. Why did it take almost a year? The acquisition had become a relatedparty transaction after Novartis purchased a 25% stake from then majority shareholder Nestlé and nominated some of its own directors to Alcon’s board. Minority shareholders therefore claimed that the deal required the approval of a committee of independent directors. The parties finally reached an agreement when Novartis increased its offer to a level that minority shareholders deemed fair.1