Novartis (NYSE:NVS) stock got a boost today after the company announced plans to spin off its Alcon business.
Novartis says that it is currently planning to spin off its Alcon business into its own publicly-traded company. It notes that the benefit of this is that the two companies will be able to better focus on their own medical efforts.
According to Novartis, the spinoff of Alcon will include everything but its ophthalmology pharmaceuticals portfolio. This will be staying with NVS. However, the company says this won’t stop Alcon from becoming a leading eye care devices company.
Novartis notes that the spinoff would have Alcon being incorporated in Switzerland. It will continue to keep Fort Worth as one of its main locations and will seek listing on the SIX Swiss Exchange and New York Stock Exchange.
The spinoff of Alcon from Novartis will have CEO Mike Ball taking over as Chairman-designate. Current COO David Endicott will also be promoted to CEO of Alcon at the same time. This change will go into effect on July 1, 2018.
Novartis notes that it isn’t expecting to complete the spinoff of Alcon anytime soon. The company still have to go through regulators and get more opinions about the process. It will also be seeking shareholder approval at its annual meeting in February 2019. If all goes well, it hopes to complete the spinoff in the first half of 2019.
NVS stock was up 3% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.