SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

January 21, 2011
 Via Facsimile (212) 610-6399 & US Mail

Thomas Werlen, Esq. Group General Counsel Novartis AG Lichtstrasse 35 4056 Basel Switzerland
 Re: Novartis AG
 Schedule 13E-3  Filed by Novartis AG and Alcon, Inc.  Filed on December 23, 2010  File No. 1-150204

Novartis AG
Form F-4 Filed December 23, 2010
 File No. 333-171381

Dear Mr. Werlen:
We have reviewed your filings and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter by amendi ng your filings, by providing the requested
information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circ umstances or do not believe an amendment is
appropriate, please tell us  why in your response.
 After reviewing any amendment to your f ilings and the information you provide in
response to these comments, we may have additional comments.

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 2

Schedule 13e-3

 General

 1. Based on disclosure of the background to the merger, it would app ear that Dr. Vasella
was a part of the initiation and structuring of  the going private transaction in his role as
Chairman of the Board of Novartis and while serving as a director and then Chairman of
the Board of Alcon.  We remind you that Rule  13e-3 requires that each affiliate engaged
in a going private transaction f ile a Schedule 13E-3 and furnis h the required disclosure.
Please revise to include Dr. Va sella as a filing person or ad vise.  For guidance, please
refer to Compliance and Disclosure Interp retation 201.05 of the Division of Corporation
Finance’s Compliance and Disclosure Interp retations of Going Private Transactions,
Exchange Act Rule 13e-3, and Schedule 13E-3.
2. We note the disclosure throughout  the prospectus that Mr. Bu ehler recused himself from
the vote approving the merger transaction.  Revise to id entify Mr. Buehler and the
conflict that led to the decision to recuse himself from the vote on the merger each time
reference is made to the recusal.  Also, s upplementally advise us of any involvement Mr.
Buehler had in the initiation, ne gotiation, or structuring of th e merger transaction and the
negotiation of post-merger employment and/or  benefits.  Your analysis should also
address whether Mr. Buehler should be considered an affiliate engaged in the going
private transaction.  Please refer to the gui dance cited to in ou r prior comment.

3. Please note that each new filing person mu st individually comply with the filing,
dissemination and disclosure re quirements of Schedule 13E-3.  Therefore, please revise
the disclosure to include all of the in formation required by Schedule 13E-3 and its
instructions for any filing persons added in  response to the preceding comments.  For
example, include a statement as to whet her each person believes the Rule 13e-3
transaction to be substantively and procedurally fair to unaffiliated security holders and an analysis of the material factors upon which they relied in reaching such a conclusion.
Refer to Item 8 of Schedule 13E-3 and Q& A No. 5 of Exchange Act Release No. 17719
(April 13, 1981).  In this rega rd, the reasons for the trans action and the alternatives
considered by these affiliates may be different  than those of the ot her filing parties, and
this fact should be reflected in the disclosure .  Alternatively, and to the extent applicable,
the affiliates may adopt the analysis and conclu sions of another filing party.  In addition,
ensure that each new filer signs the Schedule 13E-3.

4. Please revise so that the information requi red by Items 7, 8, and 9 of Schedule 13E-3 is
prominently disclosed in a “Special Factors” section in the front of the prospectus.  See
Exchange Act Rule 13e-3(e)(1)(ii).

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 3  Form F-4

 Questions & Answers, page 3

5. In addition to the Q&A you include on page 5 regarding appraisal ri ghts, please include a
question and answer in the forefront of th e Q&A that informs shareholders of the
consequences of voting against the merger.
 6. Further to our comment above.  Please suppl ement disclosure on page 84 regarding the
procedure and process under Swiss law for pur poses of exercising a ppraisal rights.  For
example, revise to include a brief descripti on of the valuation reference points that may
be considered under Swiss law with respect  to the value of the Alcon shares.
 What will I receive in the merger…,” page 3

 7. Please revise to more succinctly and clearly ex plain the merger consideration receivable.
For example, provide a hypothetical example to demonstrate the potential components of
the merger consideration receiv able in the event the Novartis  share value is equal to, less
than or greater than $60 on the relevant measur ement date.  Also, revise to include a cross
reference to disclosure regardi ng the risk associated with fluc tuations in value of Novartis
shares between the date of the meeting and the completion of the merger.

When is the merger expected to be completed…, page 6

 8. Whenever the voting requirements to approve the merger are discussed, please revise to
reference the percentage  of outstanding securities held by Novartis and its intention to
vote all of its shares to  approve the merger.
 Summary, page 11

 9. The summary term sheet should be in bullet point format and should highlight the most
important terms of the transact ion, with cross-references to more detailed discussion later
in the prospectus.  See Item 1001 of Regula tion M-A.  Please revise your term sheet
accordingly.  Also, consider combining the existing summary term sheet section with the Question and Answer section that precedes it.
 Selected Historical Fi nancial Data, page 21

 10. We note that you have incorporated your fina ncial statements by reference, but have not
included all of the summarized financial in formation specified in Item 1010(c) of
Regulation M-A in the prospectus.  For example, but without limitation, you do not
appear to have disclosed th e ratio of earnings to fixed charges.  Please revise the
registration statement to provide all disclosu re required by Item 1010(c) of Regulation M-
A.

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 4

Special Factors, page 31

 Background of the Merger, page 31

 11. Please revise this section to further descri be each contact, meeti ng, or negotiation that
took place and the substance of the discussions  or negotiations at each meeting.  Please
identify the advisors or othe r counsel and the members of management who were present
at each meeting and the persons who initiate d the meetings.  For example, revise to
disclose:
• details of discussions that occurred pr ior to January 3, 2010 amongst the Novartis
Board and/or any advisors regarding th e timing of the Second Stage Acquisition
and the Board’s decision to seek full owne rship of Alcon upon exercise of the call
option;
• when the decision was first made regarding the type of transaction best suited to
accomplish the acquisition of the minority interest in Alcon and the reasons for
the chosen structure;

• all discussions prior to January 3, 20 10 amongst the Novartis Board and/or
advisors regarding the appropriate m eans of valuing a minority squeeze out
transaction and the valua tion methods and valuation ranges considered with
respect to Alcon;

• when and how the fixed exchange rati o was chosen and whether there was a
discussion amongst the Novartis Board of any ratio greater than the 2.8 exchange
ratio proposed;

• further details of discussions at each of the meetings held during February, March,
April and May, 2010 involving the financ ial advisors to the Independent
Committee and Novartis and/or the I ndependent Committee, in which the
appropriate value per Alc on share was discussed;

• details of any discussions amongst the filing parties and/or their advisors
regarding relevant Swiss law and cor porate governance considerations with
respect to the proposed merger and the tr eatment of the minority shareholders
(i.e., before and after the receipt of opi nions from Professor Hans Caspar von der
Crone and Professor Peter Nobel);

• the discussions amongst the Novartis part ies regarding the need to change the
merger consideration structure to include  the contingent cash value amount; and,

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 5
• material aspects of Swiss law applicab le to the merger agreement discussed
amongst the parties’ Swiss legal advi sors at the December 3, 2010 meeting.

12. Each presentation, discussion or report held with or presente d by an outside party that is
materially related to the Rule 13e-3 transac tion, whether oral or written, is a separate
report that requires a reasonabl y detailed description meeting the requirements of Item
1015 of Regulation M-A.  Please advise us of the consideration given to filing the
opinions of Professors Caspar von der Crone and Nobel given what appears to be the
nexus between the substance of their opinion and the current going private transaction.

13. Please see our comment above.  We note refe rence to materials shared between the
financial advisors of the Independent Committee and Novartis at meetings held in February, March, April and May, 2010.  As noted  in our prior comment, please revise to
include a materially complete description of any such reports or materials and/or
presentations, whether oral or written.  In  addition, please file all relevant written
materials as exhibits to  the Schedule 13E-3.
 Position of Novartis Regarding th e Fairness of the Merger, page 51

14. As required by Item 1013(b) of Re gulation M-A, please revise to  disclose the alternatives
to the current transaction that were considered by each  filing party and the reasons for
their rejection.
15. While we note the viewpoints expressed by N ovartis’ board in the January 3, 2010 letter,
further supplement your disclosure to expl ain why Novartis deci ded to undertake the
going private transaction at this time .  This comment applies also to Alcon’s disclosure.
Refer to Item 1013(c) of Regulation M-A.
16. Item 1013(d) of Regulation M-A re quires a reasonably detailed discussion of the benefits
and detriments of the transaction to the comp any, its affiliates a nd unaffiliated security
holders, and the benefits and detriments must  be quantified to the extent practicable.
Further, the description must include, but not be limited to, the effect of the Rule 13e-3
transaction on each affiliate’s interest in the net book value and net earnings of the
company in terms of both dollar amounts and pe rcentages.  Please revise to include this
disclosure.  See Instruction 2 and Instruc tion 3 to Item 1013 of Regulation M-A.

17. Item 1014 of Regulation M-A requires the disc losure to include an assessment of the
fairness of the transaction to unaffiliated  shareholders.  The curre nt disclosure under this
heading references the filing party’s assessmen t of fairness to Minority Shareholders as
opposed to unaffiliated shareholders.  Please revise accordingly.

18. The recommendation and analysis by Novar tis does not sufficiently address the
procedural fairness considerations or explai n in sufficient detail w hy certain factors were
not considered.  For example, disclose why N ovartis chose not to structure the transaction

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 6
so that the merger would require approval of  at least a majority of the unaffiliated
security holders.  Refer to Item 1014(c) of Regulation M-A.  Further, similar to the
disaggregated discussion provi ded by Alcon of the Board’s consideration of substantive
and procedural fairness, expa nd and separately address Nova rtis’ consideration of other
procedural safeguards implemented while structuring the deal.

19. The factors listed in Instruction 2 to It em 1014 of Regulation M-A are those generally
considered relevant in addressing the substa ntive fairness of a goi ng private transaction
and should be discussed.  See
 Q & A No. 20 in Exchange Act Release 17719 (April 13,
1981).  While we note reference to the valua tions methodologies used or considered by
the various financial advisors, further discus sion is warranted to clarify the parties’
conclusions regarding fairness.  For exam ple, expand the discussion to address:

• whether and if so, how, the Novartis Bo ard considered the valuation of $181 per
share paid to Nestlé for Alcon shar es in the Second Stage Acquisition;

• the consideration by Novartis of the prem ium paid for shares in prior squeeze out
transactions involving Novartis;

• the Novartis and Alcon Boards’ consideration of premiums paid in comparable
transactions;

• Novartis’ considerati on of the upper end of the range of trading prices for the 52
weeks ended December 13, 2010 considered by Credit Suisse;  and,

• the various other analyses of Credit Suisse which incl uded per share prices and
valuations in excess of the $168.

 In revising your disclosure in response to our comments, please be advised that all
disclosure required by Item 8, as well as Item s 7 and 9, must be included in the document
disseminated to security holders  in full, including responses in the negative.  See General
Instruction E to Schedule 13E-3.
 20. Note that if a filing party ha s based its fairness determination on the analyses of factors
undertaken by others (e.g., by the financial a dvisors and/or Independent Committee), the
filing party must expressly adopt
 such analysis and discussi on as its own in order to
satisfy the disclosure obligations of Item 1014(b) of Regulation M-A.  Refer to Question
Nos. 20 &21 of Exchange Act Release No. 34-17719 (April 13, 1981).  As such, revise to
disclose whether Novartis expressly adopted  the Credit Suisse di scussion commencing on
page 43 or any other portion of an analyses  undertaken by another party.  If not, please
revise to address each of the f actors listed in paragraphs (c), (d), and (e) and Instruction 2
to Item 1014.  We note for example, the absence of a discussi on regarding the going
concern value or the purchase price paid in recent transactions i nvolving Alcon shares.

Mr. Thomas Werlen
Novartis AG January 21, 2011 Page 7

21. We note the reference to the multiple of 20 times Alcon’s 2011 earnings based on IBES
consensus estimates.  Please supplement your disclosure to provide further context to this statement.  For example, clarify how such estimates were produced and whether the 2011
earnings projections used to produce the estim ates were approved or agreed upon by the
Independent Committee or Alcon Board as being representative  of projected 2011
earnings.
Forward Looking Statements, page 89

 22. Please note that the safe harbor  provisions of the Private S ecurities Litigation Reform Act
of 1995 are not available to statements ma de in connection with a going private
transaction.  Refer to Exchange Act S ection 21E(b)(1)(E) and Question and Answer
117.05 of the Division of Corporation Fi nance’s Compliance and Disclosure
Interpretations for Going Private Transacti ons, Exchange Act Rule 13e-3 and Schedule
13E-3.  Please revise this section accordingly.  Additionally, revise to include disclosure
stating that the safe harbor provisions in the 20-F incorporated by reference into the
registration statement do not apply to any forward-looki ng statements the company
makes in connection with the going private transaction.
 The Extraordinary General Meeting of Alcon Shareholders, page 90

23. Notwithstanding the limitations on enforcement of United States laws, please revise to
clarify to state, if true, that a vote with re spect to the discharge fo r purposes of Swiss law
would not prec