Novartis Announces Option Exercise and Merger Proposal

Announces Option Exercise and Merger Proposal

HUENENBERG, Switzerland - January 4,

2010 - Novartis AG (NYSE: NVS) announced today that it had exercised its

option to purchase the remaining shares in Alcon, Inc. (NYSE: ACL) owned by

Nestle S.A. at a weighted average price of US$180 per share in

cash. The exercise is pursuant to an agreement between Nestle and

Novartis that was executed on

2008. The option exercise is subject to regulatory approvals and

covers approximately 156 million shares of Alcon held by Nestle, representing

approximately 52 percent of Alcon's outstanding shares. Upon

consummation of the purchase, Novartis would own an approximate 77 percent

also announced that it has submitted to the Alcon board of directors a proposal

for a merger of Alcon with and into Novartis to be effected under Swiss merger

law. Under the terms of the merger proposal, holders of the

approximately 23 percent of Alcon shares that are publicly-traded would receive

2.8 Novartis shares for each Alcon share. Based on the Novartis share

price and U.S. dollar/Swiss franc exchange rates prior to the announcement, this

would value each publicly-traded share of Alcon at approximately

US$153. The proposed merger would be contingent upon, among other

things, approval by the Alcon Board of Directors, the closing of the purchase

and sale transaction related to the Novartis option exercise as well as receipt

of required regulatory approvals.

Independent Director Committee, composed of Alcon's three independent board

members, was formed in 2008 in connection with Novartis' initial purchase of

percent of the Alcon Shares from Nestle to evaluate transactions such as the

proposed merger. The Committee has engaged independent financial and

legal counsel in connection with its evaluation of the proposed

Inc. is the world's leading eye care company, with sales of approximately $6.3

billion in 2008. Alcon, which has been dedicated to the ophthalmic

industry for 65 years, researches, develops, manufactures and markets

pharmaceuticals, surgical equipment and devices, contacts lens solutions and

other vision care products that treat diseases, disorders and other conditions

of the eye. Alcon operates in 75 countries and sells products in 180

markets. For more information on Alcon, Inc., visit the Company's web

site at www.alcon.com.

Caution Concerning Forward-Looking

Statements. This press release may contain forward-looking statements

within the meaning of the United States Private Securities Litigation Reform Act

of 1995. Any forward-looking statements reflect the views of our management as

of the date of this press release with respect to future events and are based on

assumptions and subject to risks and uncertainties. Given these uncertainties,

you should not place undue reliance on these forward-looking statements. There

can be no guarantee that Novartis or Alcon will achieve any particular future

financial results or future growth rates or that Novartis or Alcon will be able

to realize any potential synergies, strategic benefits or opportunities as a

result of the consummation of the Novartis purchase or the proposed merger. Except

to the extent required under the federal securities laws and the rules and

promulgated by the Securities and Exchange Commission, we undertake no

obligation to publicly update or revise any of these forward-looking statements,

whether to reflect new information or future events or circumstances or

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