Nestle May Buy Summit for More Than $600
Million, WSJ Reports
By Kristin Jensen
Lausanne, Switzerland, May 26 (Bloomberg) -- Nestle SA is in talks to buy laser
maker Summit Technology Inc. of the U.S. for more than $600 million to
expand its eye-care unit, the Wall Street Journal reported, citing a person
familiar with the matter.
Officials from both companies declined to comment.
Nestle, the world's largest food company, is also Switzerland's third-biggest
pharmaceutical maker, after Roche Holding AG and Novartis AG. The
company's Alcon Laboratories Inc. ophthalmic unit was one of its
best-performing divisions last year with sales of 3.6 billion Swiss francs ($2.1
billion).
Summit is the No. 2 maker of eye lasers used to correct vision, a procedure
growing in popularity in the U.S. Buying the Massachusetts-based company
offers Nestle an opportunity to increase its presence in the U.S., the world's
biggest market.
``Alcon is doing very well,'' said Christian Schoefel, an analyst at Lombard
Odier & Cie. with a ``accumulate'' rating on Nestle. ``I'm not astonished if
they want to expand.''
Alcon is planning to pay cash and offer a premium over Summit's current market
value of about $600 million, a person close to the talks said, according to the
Journal. Negotiations were continuing last night though one person close to the
talks said there is no guarantee an agreement will reached, the newspaper said.
The Nestle unit makes products ranging from disinfectant solution for contact
lenses to medical equipment to treat eyes.
Summit shares fell 0.95 euro to 13.65 euros ($12.50) in recent trading in
Germany after closing at 12 11/16 in the U.S. Nestle shares, meanwhile, fell 12
francs, or 0.4 percent, to 3,327 in recent trading.
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