Roche Friendly Buys Genentech

In the statement, put out by Roche, it reads "Roche and Genentech reach a friendly agreement to combine the two organizations and create a leader in healthcare innovation." Genentech's board agreed to Roche's offer, making this the third major deal this year, following Pfizer's (PFE) agreement to buy Wyeth (WYE) and Merck's (MRK) deal to buy Schering-Plough (SGP).

Roche is based in Switzerland. Genentech is based in California.

Dr. Charles Sanders, Chairman of the Special Committee of Genentech’s Board of Directors, said: “We believe this is a fair offer for Genentech shareholders, and the Committee is pleased to come to a successful conclusion of this process. We look forward to working with Roche to complete the transaction as expeditiously as possible”.

Franz B. Humer, Chairman of the Roche Group, said: “We are very pleased that we have reached an agreement with Genentech and secured a positive recommendation from the special committee. As stated previously, an agreed transaction offers clear and important advantages for the shareholders of both companies. I am delighted that the intensive negotiations have led to a successful conclusion. Working together, we aim to close the transaction quickly, thus removing uncertainty for employees and allowing us to focus even more intently on innovation and long-term projects. We have tremendous respect for our colleagues at Genentech and look forward to working with them to further accelerate our search for solutions to unmet medical needs”.

Readers may want to recall that in July of 2008 Roche had made an offer to acquire Genentech for $89 dollars a share. The deal at the time would have been payment of approximately US$43.7 billion to equity holders of Genentech. However, it took more than half a year to conclude a friendlier deal for Genentech raising it to US$46.8 billion.

The highlights of Roche Genentech deal

Roche intends to acquire all outstanding shares of Genentech for US$95.00 per share in cash. Research and early development to operate as an independent center; South San Francisco site to become headquarters of combined U.S. commercial operations; Genentech’s unique culture to be maintained.

Innovation will be enhanced through a diversity of research approaches and sharing of IP, technologies, partnerships and other key assets.Transaction expected to be EPS accretive in the first year after closing.

Roche's buyout of Genentech changes the landscape of the big pharma and draws a new map in the pharmaceutical industry along with Merck and Pfizer.