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  * Nestlé has agreed to sell 24.85 percent of Alcon's issued and
    outstanding capital to Novartis for approximately USD 11 billion
    in cash.
  * From 2010 on, Novartis and Nestlé will have call and put option
    rights exercisable over Nestlé's remaining majority shareholding
    in Alcon.

Peter Brabeck-Letmathe, Chairman and CEO of Nestlé said: "Today's
decision reflects Nestlé's commitment to ensure a strategically sound
and financially attractive solution for Nestlé and Alcon. Nestlé has
been able to take a further step in realizing shareholder value from
its long-term Alcon investment. Alcon benefits from having a new
minority shareholder whose activities are closely aligned with its
own business and I am certain that this strategic decision will
strengthen Alcon's leadership position in the very promising
ophthalmic area."
Nestlé and Novartis have signed an agreement providing for the sale
of 24.85 percent of Alcon's issued capital to Novartis. The cash
transaction concerns 74 million Alcon shares at USD 143.1783 per
share, with an aggregate value of approximately USD 11 billion.
Nestlé will retain close to 52 percent of Alcon's issued capital and
continue to fully consolidate Alcon. There is no capital gains tax
impact on Nestlé.
The proceeds of the transaction will be used by Nestlé to reduce debt
as the company pursues its on-going share buy-back program. In
addition, these proceeds will support opportunities for profitable
growth in line with the Group's nutrition, health and wellness
orientation. The transaction will have a positive effect on reported
earnings per share (EPS) in 2008 and should be neutral on underlying
EPS in 2008 and beyond. The transaction is subject to regulatory
review and Nestlé expects the process to be completed before autumn
of 2008.
In addition, Nestlé and Novartis have agreed put and call option
rights on the remaining Alcon shares owned by Nestlé. From January
2010 till July 2011, Novartis will have a call option to acquire
Nestlé's remaining majority shareholding in Alcon. This call option
is at a fixed price of USD 181.- per share. During the same period,
Nestlé will also have a put option to sell its remaining majority
shareholding in Alcon to Novartis at the lower of either the call
price of USD 181.- per share or the average share price during the
week preceding the exercise plus a premium of 20 percent. The
completion of the sale of Nestlé's remaining shareholding in Alcon
would also be subject to regulatory approval.

Contacts:
        Media: François-Xavier Perroud (Nestlé) Tel.: +41-21-924 2596
        Investors: Roddy Child-Villiers (Nestlé) Tel.: +41-21-924
        3622


 
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Nestlé S.A.
Avenue Nestlé 55 Vevey 

WKN: 887208; ISIN: 
CH0012056047; Index: SLCI, SMI, SPI, SMIEXP;
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